Hyosung Heavy Shares Sink 66% From Peak to 1.612 Million Won, Outpacing SK Hynix Drop
Summary
- Hyosung Heavy’s share price plunged about 66%, falling from a peak of 4.742 million won to a recent 1.612 million won.
- Third-quarter consolidated operating profit came to 243.5 billion won, up from a year earlier but well below the consensus estimate of 306.5 billion won, weighing on the stock.
- Brokerages cut their target prices from the 4 million won range to the 3 million won range, citing uncertainty over US trade policy and lower sector valuations, while the union’s threat of a full strike added to the pressure.
Forecast Trend Report by Period
‘Emperor Stock’ Hit by Twin Blows of Share Slump and Strike Threat
Hyosung Heavy Industries Inc., once dubbed an “emperor stock” after climbing to nearly 5 million won, has plunged more than 60% from its peak. The stock has fallen by more than half and is now down close to two-thirds, a steeper drop than that of major semiconductor shares including SK Hynix Inc. The company is also facing a double hit from earnings that missed market expectations and a looming labor strike.
As of Nov. 6, the latest trading session, Hyosung Heavy shares closed at 1.612 million won, down 9.99% from the previous session, according to industry data compiled on Nov. 8. That is about 66% below the stock’s one-year high of 4.742 million won.
The weak share performance is being attributed first to earnings that failed to meet market expectations. Hyosung Heavy reported third-quarter consolidated operating profit of 243.5 billion won, up 10.8% from a year earlier, but well short of the consensus forecast of 306.5 billion won. The results were affected by logistics disruptions and rising costs.
Brokerages have also sharply lowered their target prices for Hyosung Heavy into the 3 million won range from the 4 million won range, citing increased uncertainty over US trade policy and weaker valuations across the sector.
Labor-management tensions have added to the pressure. The union representing office and technical workers at Hyosung Heavy warned it would launch a full-scale strike for two weeks starting Nov. 17 if management does not present a satisfactory comprehensive proposal. The union had already staged a 72-hour warning strike from Nov. 4 through Nov. 6.
The union is demanding a 10% increase in base pay, clear standards for bonus payouts and narrower welfare gaps among job categories. It argues that employee compensation did not adequately reflect the company’s performance even though consolidated operating profit more than doubled last year, rising 106% from a year earlier to 747 billion won.
Kim Bong-gu, Hankyung.com reporter kbk9@hankyung.com
Korea Economic Daily
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