Xiaoxing Heavy Industries, the stock price increase widens... the highest price breaks through 4 million Korean won

Xiaoxing Heavy Industries’ stock price on the 27th, driven by continuous upward revisions of target prices by securities firms, first broke through 4 million won during trading, setting a new record.

On that day, Xiaoxing Heavy Industries closed at 3.94M won, up 10.95% from the previous trading day. The stock price briefly rose to 4.01M won at the start of trading, surpassing the 4 million won mark for the first time in history, but later narrowed gains due to profit-taking selling triggered by the short-term rapid rise. Market analysis suggests that although first-quarter earnings slightly fell short of expectations, the market places greater emphasis on the significant increase in future order volume.

After the market close on the 24th, Xiaoxing Heavy Industries announced that, based on consolidated financial statements, the operating profit for the first quarter of this year was 1.523 trillion won, up 48.8% year-over-year. However, this figure was 9% lower than the market expectation of 1.675 trillion won, as estimated by United Infomax. Usually, quarterly earnings below expectations put pressure on the stock price, but this time, the market’s valuation of future order value exceeds current earnings. In the heavy industry sector, the confirmed order volume, or order backlog, is regarded as a core indicator for performance in the coming years.

The significant upward revision of target stock prices by securities firms is also based on this. Shinhan Investment Corp. raised Xiaoxing Heavy Industries’ target price from 2.9 million won to 4.2 million won. Analysts Lee Dong-hyun and Lee Ji-han commented that despite the first-quarter results being below expectations, new orders received showed explosive growth. They analyzed that, especially amid the boom in the North American power equipment market, the company set a quarterly record for new orders, with an order backlog reaching 15 trillion won, securing nearly five years of order volume. SK Securities also raised the target price to 4.7 million won, believing that the company’s forecast for new orders this year is very likely to be revised upward.

The North American market is particularly under focus because of structural growth in power infrastructure replacement demand. As reshoring manufacturing, old power grids being replaced, and the proliferation of artificial intelligence and data centers drive electricity demand, the demand for power equipment such as transformers is increasing. Xiaoxing Heavy Industries recently signed a contract to supply ultra-high-voltage transformers with the UK’s Scottish Power Network (SPEN), aligning with the global trend of investment in power equipment. In the day’s capital flow, individual investors and institutions net bought 15 billion won and 39 billion won respectively, while foreign investors net sold 54 billion won. This trend indicates that if the market continues to prioritize long-term order fundamentals over short-term earnings fluctuations, it may still influence stock valuation in the future.