Photo courtesy of HD Hyundai
Shares of HD Hyundai Heavy Industries have surged nearly 45% in just two weeks. The company’s market capitalization has surpassed 70 trillion won ($51 billion), driven by strong orders in its core commercial shipbuilding business combined with new contracts for artificial intelligence (AI) data center power equipment and icebreaker vessels.
Largest-Ever Power Equipment Contract Rides AI Tailwind
According to the Korea Exchange on Wednesday, HD Hyundai Heavy Industries (329180.KS) closed at 671,000 won last Friday, up 4.68% from the previous trading day. The stock has climbed 30.5% from a week earlier, when it traded at 514,000 won, and 44.5% over the past two weeks. The performance stands out against a 4.6% gain in the KOSPI during the same period.
The rally was directly triggered by a series of major order announcements unveiled on Oct. 22.
On that day, HD Hyundai Heavy Industries said it had signed a contract with U.S. energy infrastructure developer Aperion Energy Group (AEG) to supply 20-megawatt power generation equipment based on its “HiMSEN” engines.
The contract, valued at 627.1 billion won ($457 million), marks the company’s largest-ever power generation engine deal and its first entry into the U.S. data center market. The deal demonstrates the potential for shipbuilders to directly benefit from expanding AI infrastructure investment.
On the same day, the company signed a contract with the Swedish Maritime Administration to build one dedicated icebreaker vessel worth approximately 510 billion won ($350 million). It marked the first time a Korean shipbuilder has won an overseas icebreaker order, beating out traditional icebreaker powerhouses such as Finland and Norway.
HD Hyundai Heavy Industries shares jumped 11.28% on Oct. 22, posting the largest gain among top market-cap companies that day.
Strong orders for gas carriers, including liquefied natural gas (LNG) and liquefied petroleum gas (LPG) vessels, are also stimulating investor sentiment. The company had already achieved 43% of its annual commercial vessel order target of $11.47 billion by the end of March, providing another boost.
Market Cap Ranking Climbs Two Spots, Brokerages Raise Targets
The stock’s surge has reshuffled market-cap rankings. As of last Friday, HD Hyundai Heavy Industries’ market capitalization stood at 70.43 trillion won ($51 billion), ranking ninth excluding preferred shares. That is up two spots from 11th on Oct. 17, just a week earlier.
Brokerages are successively raising their price targets. NH Investment & Securities lifted its target price to 860,000 won from 800,000 won in a report issued Oct. 23. “HD Hyundai Heavy Industries is the only company that excels in all four areas: commercial ships, offshore, defense, and engines,” said Jung Yeon-seung, analyst at NH Investment & Securities.
However, exchangeable bonds issued by HD Korea Shipbuilding & Offshore Engineering based on its 4.32% stake in HD Hyundai Heavy Industries, along with uncertainty over the entity responsible for U.S. investment, are cited as factors that could increase volatility.