A so-called "emperor stock" trading above 3.9 million won per share has emerged. The company behind it is Hyosung Heavy Industries (298040.KS), a power equipment maker. Emperor stocks typically refer to shares priced above 1 million won. Hyosung Heavy has far exceeded that threshold and is now approaching the 4 million won mark.
Market interest is growing further given that the stock's upward momentum has not weakened despite first-quarter operating profit falling short of brokerage estimates. Some securities firms have set their target price for Hyosung Heavy at 5 million won.
On Tuesday, Hyosung Heavy closed at 3.941 million won, up 10.95% from the previous trading day. The stock has surged 758% from around 450,000 won a year earlier.
The pace of gains has also been steep this year. Hyosung Heavy's share price, which stood at 1.845 million won at the start of the year, rose to 2.823 million won on February 27, just before the U.S.-Iran war broke out. The stock briefly fell to the 2.2 million won range immediately after the conflict but rebounded, surpassing 3 million won per share for the first time on the 13th. It then reached the 3.5 million won range in nine trading sessions before jumping to the 3.9 million won level the next day.
The key driver behind Hyosung Heavy's share price rally is rising power demand stemming from the spread of artificial intelligence (AI). Hyosung Heavy produces ultra-high-voltage power equipment including transformers and circuit breakers. Global investment in AI data centers has expanded recently, causing power consumption to surge and heightening concerns about supply shortages in the ultra-high-voltage power equipment market.
Market analysts say that, similar to the current semiconductor supply shortage, a situation in which demand exceeds supply in the power equipment sector could persist for some time.
Brokerages are also raising their target prices. Yuanta Securities set its target price for Hyosung Heavy at 5 million won. "Recent orders have seen an expanded share of ultra-high-voltage, high-specification products such as 765kV transformers and 800kV GCBs, leading to both average selling price (ASP) increases and margin improvements," said Son Hyun-jung, an analyst at Yuanta Securities.
Son also viewed positively the fact that Hyosung Heavy secured a 765kV power grid project in the United States worth approximately 920 billion won during the first quarter. "With a 50% cumulative installation reference, package response capabilities, and a production base within the United States, its competitive advantage in the high-voltage market is firmly established," she said.
She added, "The company is also pursuing the commercialization of direct current (DC) power supply for data centers, which is highly significant in that it is expanding its coverage from the transmission area to the internal power structure of data centers."
While there are some concerns about whether growth in the North American market will continue, brokerage views are generally positive. "Considering reshoring, aging power grids, and AI/data center investment, the boom in the North American market is unlikely to be short-lived," said Lee Dong-heon, an analyst at Shinhan Securities.
