"Thriving in the New Power Era" – HD Hyundai Electric Achieves a Staggering 20% Operating Profit Margin in 2024

[Korea Financial Times, Shin Haeju] With the dawn of the "New Power Era," HD Hyundai Electric (CEO Cho Seok) is soaring to new heights.

The company recorded its highest-ever revenue of KRW 3.3233 trillion last year. Notably, its operating profit reached KRW 669 billion, achieving an impressive 20% operating profit margin—an exceptional feat for a manufacturing company.

How did HD Hyundai Electric achieve such results? The company primarily focuses on producing high-value ultra-high voltage (UHV) power equipment among various power devices. It holds the largest market share in South Korea’s UHV power equipment sector.
An industry official explained, "Ultra-high voltage power equipment is extremely expensive. For instance, the contract value of an ultra-high voltage direct current (HVDC) transformer can reach up to KRW 500 billion."

According to the Korea Trade Statistics Information Portal (TRASS), in October last year, the export price of ultra-high voltage transformers peaked at $19.99 per kilogram (approximately KRW 29,335).

Another strength of HD Hyundai Electric is its selective order strategy. Since late 2019, the company has moved away from low-margin contracts and adopted a profit-focused approach to order selection. This shift helped the company turn around from operating losses of KRW 100.6 billion and KRW 156.7 billion in 2018 and 2019, respectively, to a profit of KRW 72.7 billion in 2020.

In 2023, HD Hyundai Electric secured orders worth $3.816 billion (approximately KRW 5.6015 trillion), exceeding its original business plan by $73 million (approximately KRW 107.1 billion).

The company's success is also attributed to its strong presence in the U.S. market, where demand for power equipment is rising. HD Hyundai Electric currently holds the No. 1 market share in the U.S. ultra-high voltage transformer sector.

Among South Korea's three major power equipment manufacturers (LS Electric, Hyosung Heavy Industries, and HD Hyundai Electric), HD Hyundai Electric operates the largest transformer production facility in the U.S. It has two key subsidiaries: HD Hyundai Electric America Corporation in Atlanta, which handles transformer sales, and HD Hyundai Power Transformers USA in Alabama, which manufactures industrial power equipment.

As of the end of 2023, the Atlanta subsidiary recorded KRW 633.6 billion in revenue, while the Alabama subsidiary posted KRW 285.9 billion. However, in Q4 2024, the company's North American revenue fell 11.8% year-on-year to KRW 181.8 billion, as deliveries from its U.S. subsidiary were postponed at the request of customers.

Shin Haeju (hjs0509@fntimes.com)