en.Wedoany.com Reported - South Korean electrical equipment stocks showed strong performance in early trading on June 19, with the market attributing the trend to expectations of expanded orders for power equipment such as transformers.
According to data from the Korea Exchange, as of 10:25 a.m. on the same day, the electrical equipment industry index rose 5.07%. Within the sector, 14 stocks gained, 2 remained flat, and 18 declined.
Among higher market-cap stocks, LS Electric rose 25,500 won (10.54%) from the previous trading day to 267,500 won. During the same period, Hyosung Heavy Industries rose 251,000 won (6.80%) to 3,944,000 won; Sanil Electric rose 10,000 won (4.14%) to 251,500 won; and HD Hyundai Electric rose 33,000 won (3.04%) to 1,120,000 won. LS rose 18,500 won (4.43%) to 436,000 won. In contrast, Gaon Cable fell 8.82%, while Daehan Cable and LS Eco Energy also declined by 1.90% and 1.54%, respectively.
The strength of electrical equipment stocks is believed to be influenced by expectations of expanded orders for power equipment companies and related reports. LS Securities analyst Sung Jong-hwa noted in a power equipment industry report on the same day that after rising in early May, power equipment stock prices experienced a correction of over 30% in the month leading up to early June, and have since shown a recovery trend.
LS Securities forecasts that LS Electric will report strong order performance in the second quarter of this year, expected to exceed 2 trillion won, representing a growth of over 230% compared to the same period last year. LS Securities believes LS Electric's orders this year could surpass its guidance of 4.1 trillion won, reaching 5 trillion won, and possibly even 6 trillion won.
For Hyosung Heavy Industries, its heavy industry division recorded orders of 4.2 trillion won in the first quarter of this year, up 108% year-on-year, with second-quarter orders expected to range between 1.5 trillion and 2 trillion won. Full-year orders are anticipated to significantly exceed the company's guidance of over 8.4 trillion won, representing year-on-year growth of more than 10%.
HD Hyundai Electric's order guidance for this year is $4.222 billion, down 11% from last year, but LS Securities views this as a conservative estimate. HD Hyundai Electric recorded orders of $1.797 billion in the first quarter, up 35% year-on-year. Sanil Electric is expected to see second-quarter orders exceed the first quarter's 179 billion won, with full-year orders also surpassing the guidance of 700 billion won.
Transformer export data also provided support for some investment sentiment. According to data from the Korea Trade Statistics Promotion Service (TRASS), overall transformer export value grew 0.2% year-on-year in April and declined 5.4% in May, showing lackluster performance. However, exports of extra-large transformers (HS CODE 8504.23), the main product of top power equipment companies, increased by 41.5% and 23.3% year-on-year in April and May, respectively.
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