Top 4 S.Korean Power Equipment Stocks, Ranked by Macquarie

Top 4 S.Korean Power Equipment Stocks, Ranked by Macquarie

US stock futures slide further with tech set for more losses; Netflix disappoints Investing.com -- Macquarie ranked its top four picks among South Korea’s power equipment stocks, highlighting companies with accelerating order momentum driven by high-voltage transformer demand and data-centre infrastructure buildouts. The brokerage maintained Outperform ratings on three of four covered stocks while upgrading one to Neutral Hyosung Heavy remained Macquarie’s top pick, rated Outperform with a 4.7 million Won target, implying 76% upside. The broker cited superior earnings visibility, accelerating 765kV order momentum, and margin expansion.

It expected another solid quarter of orders, pushing first-half intake to roughly 76% of full-year guidance, with further upside from a Quanta Services GIS joint venture. Hyosung traded at a valuation discount to global peers despite strongest order growth in the sector. HD Hyundai Electric ranked second in Macquarie’s pecking order, kept at Outperform with an unchanged 1.6 million Won target, or 102% upside.

The broker highlighted a 23% fiscal 2026 order guidance upgrade, the first double-digit intake growth guidance since 2021, driven by 765kV transformer demand, an Alabama production ramp-up, and a new Won1.1 trillion hyperscaler framework agreement. Macquarie also flagged HDHE’s rotating business as an emerging growth leg through group-level data-centre power deals. Sanil Electric stayed rated Outperform, though Macquarie cut its target price 16% to 270,000 Won citing sector-wide multiple compression.

The broker still expected healthy order growth from expanding US data-centre exposure, particularly through its Bloom Energy relationship, alongside continued strength in specialized transformers for renewables. Sanil’s power grid segment remained a laggard. Macquarie raised 2026 and 2028 EPS estimates modestly on order intake assumptions, keeping the stock last in its pecking order.

LS Electric LS Electric was upgraded to Neutral from Underperform, with an unchanged 170,000 Won target implying 9% downside. Macquarie argued the recent correction had largely priced in downside risk, while stronger-than-expected order momentum, including a raised fiscal 2026 order growth forecast to 55%, provided support. Still, the broker stopped short of Outperform, saying it needed clearer evidence of margin expansion before turning more constructive on the stock.