HD Hyundai Electric's shares fell sharply in early trading on concerns that the contribution of its new business to earnings may be delayed longer than expected, despite the company reporting second-quarter results that met market expectations.
As of 9:56 a.m. on July 29, HD Hyundai Electric's stock was trading at 613,000 won, down 13.05% (92,000 won) from the previous trading day, according to the Korea Exchange.
Market analysts believe that investor sentiment has been dampened by the possibility that significant revenue from the distribution business may not materialize as soon as anticipated.
During a conference call following its earnings announcement, HD Hyundai Electric stated that while it is in discussions with major global tech companies, revenue from the distribution sector is not expected to be fully reflected until after 2029. This has led to a growing perception that the new growth drivers will not contribute to earnings in the short term.
Additionally, uncertainties related to tariffs have weighed on short-term investor sentiment. The company reported that the impact of U.S. countervailing duty refunds was only about 6 billion won in the second quarter, and the actual benefits from tariff-related improvements are expected to become visible in about two years.
However, the company's overall performance remained solid. HD Hyundai Electric announced that its consolidated revenue for the second quarter reached 1.1418 trillion won, with an operating profit of 287 billion won, marking increases of 26.0% and 37.3%, respectively, compared to the same period last year.
* This article has been translated by AI.
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