Investment Value Assessment of HD Hyundai Group’s Listed Companies: Portfolio Analysis in the Era of Renewable Energy Transition
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The global renewable energy market in 2025 is reaching an unprecedented turning point. According to the International Energy Agency (IEA), the global renewable energy capacity is expected to reach 510GW this year, an 85% increase from the previous year, with solar power accounting for 70% of this growth. The alignment of the U.S. Inflation Reduction Act (IRA), Europe’s REPowerEU plan, and China’s carbon neutrality policy is expanding global energy infrastructure investment to $1.8 trillion annually. Amidst these megatrends, affiliates of South Korea’s HD Hyundai Group are charting different positions and growth trajectories.
HD Hyundai Group holds a portfolio covering the entire energy ecosystem, from shipbuilding, power equipment, construction machinery, to energy solutions. However, a comprehensive analysis of market evaluation, performance, profit structure, and growth potential as of 2025 reveals significant differences in investment attractiveness among affiliates. Particularly, investor evaluations vary greatly depending on each company’s position and profitability structure within the renewable energy value chain. According to a recent report by global consulting firm McKinsey, the most profitable areas during the energy transition are power infrastructure and energy storage systems (ESS), whereas manufacturing sectors like solar modules face intensified margin pressures due to the overwhelming price competitiveness of Chinese companies.
Evaluating the investment value of HD Hyundai Group’s eight listed companies on a scale of 10, a clear hierarchical structure from Group 1 to Group 4 emerged. This evaluation considers not only current performance but also growth visibility over the next 3-5 years, industry characteristics, global competitiveness, and the degree of benefit from the renewable energy transition. Key evaluation factors include the expansion of power infrastructure investment in the U.S. and Middle East, the eco-friendly shipbuilding supercycle, and the electrification trend in construction equipment.
Group 1: Premium Stocks Securing Both Long-term Growth and Profit Stability
HD Hyundai Electric, based in Ulsan, received the highest rating of 9.1 within the HD Hyundai Group. This is due to the company’s pivotal position in power equipment (transformers, GIS), ESS, and global power infrastructure. As of 2024, HD Hyundai Electric’s operating profit margin stands at 12.3%, significantly exceeding the domestic power equipment industry average of 8.5%. The modernization of the U.S. power grid and a construction boom of large-scale power plants in the Middle East have increased the company’s order backlog by 47% year-on-year to 2.3 trillion KRW in 2025. The ESS business segment is projected to grow from 800 billion KRW in sales in 2024 to 2 trillion KRW by 2027, reflecting the global ESS market’s average annual growth rate of 28%.
Hyundai Heavy Industries, also based in Ulsan, ranked second with a score of 8.8. The company holds an overwhelming order backlog in LNG carriers, eco-friendly ships, and warships, providing high visibility for performance over the next 2-3 years. As of October 2025, Hyundai Heavy Industries’ order backlog is 24 trillion KRW, equivalent to 1.8 times its annual sales. The company maintains a leading position with a global market share of 35% in the eco-friendly ship market, including ammonia and methanol-powered vessels. According to Clarkson Research, global new ship orders in 2025 are expected to increase by 23% year-on-year, with eco-friendly ships comprising 40% of the total. The average ship price for Hyundai Heavy Industries rose by 15% compared to 2023, directly linking to operating profit leverage.
HD Hyundai Infracore, based in Seoul, ranked third with a score of 8.3. The company is continuously expanding its market share in the global forklift and excavator market, excluding China, and securing new growth momentum in AI-based autonomous construction equipment and electrification equipment. As of 2024, the company’s market share in the global forklift market outside China is 18.2%, up 1.3 percentage points from the previous year. The surge in demand for electric forklifts in North America and Europe led to a 65% increase in related sales year-on-year. Global market research firm Frost & Sullivan projects the electrification market for construction equipment to grow from $12 billion in 2025 to $38 billion by 2030, with an average annual growth rate of 26%. HD Hyundai Infracore has significantly improved its financial stability and profitability compared to its time as Hyundai Doosan Infracore, with its debt ratio falling from 85% to 62%.
Groups 2 and 3: Investment Merits and Risk Factors Depending on Circumstances
Hyundai Mipo Dockyard, based in Ulsan, is at the top of Group 2 with a score of 7.9. As a strong player in the mid-sized ship sector, it maintains a solid order base but is considered to have relatively weaker momentum compared to Hyundai Heavy Industries. The order backlog for 2025 is 7.2 trillion KRW, 1.6 times its annual sales, with the price increase rate for its main products, container ships, and bulk carriers, at a relatively lower 8-10% compared to Hyundai Heavy Industries’ LNG carriers. However, considering the stability and continuous replacement demand in the mid-sized ship market, stable growth is deemed possible in the mid to long term.
Hyundai Oilbank, based in Seosan, scored 7.6, receiving a mid-to-high evaluation despite the cyclical dependency typical of refining companies, due to dividend income and the potential recovery of refining margins. As of Q4 2024, the refining margin improved by 15% year-on-year to $8.2 per barrel, with further improvement expected in 2025 alongside global economic recovery. The company’s ongoing listing plan is also anticipated to act as a catalyst for valuation reassessment. Currently, Hyundai Oilbank’s PBR is 0.7, below the domestic refining industry average of 0.9, indicating significant room for valuation normalization post-listing.
HD Hyundai, the holding company based in Seoul, received a mid-level score of 7.5. The company is considered undervalued relative to its intrinsic value due to a significant holding company discount applied to its asset value. The discount rate compared to HD Hyundai’s net asset value (NAV) is 35%, exceeding the domestic holding company average of 25%. While there are clear synergies in the energy, shipbuilding, and power sectors, the lack of specific visibility acts as a constraint.
Hyundai Construction Equipment, formerly Hyundai Doosan Construction, based in Incheon, is in Group 3 with a score of 6.2. The high risk and financial burden characteristic of the construction industry are major constraints. As of 2024, the company’s debt ratio is 180%, significantly above the construction industry average of 140%, and despite improvements in the order environment, the process of resolving losses from past projects continues. However, with the government’s expansion of SOC investment and the recovery of the reconstruction and redevelopment market, gradual improvement is expected in the mid to long term.
HD Hyundai Energy Solutions, based in Eumseong, received the lowest score of 5.4 within the HD Hyundai Group. This is attributed not to the company’s own issues but to the fundamental limitations of the solar module industry structure. Module manufacturing in the solar value chain is the lowest value-added area, and securing profitability is extremely challenging in the face of the overwhelming price competitiveness of Chinese companies. As of 2024, China’s global market share in solar modules is 78%, with the production cost of modules by China’s leading company, Jinko Solar, being 25-30% cheaper than that of Korean companies. HD Hyundai Energy Solutions’ operating profit margin in 2024 is 2.1%, in stark contrast to HD Hyundai Electric’s 12.3%.
Particularly, high-profit business areas such as ESS and EPC (Engineering, Procurement, and Construction) are dominated by other affiliates within the group, limiting HD Hyundai Energy Solutions’ potential for profitability improvement. According to BloombergNEF, solar module prices fell by 20% throughout 2024, with further declines expected in 2025. This is due to overproduction by Chinese companies and accelerated technological innovation, intensifying profitability pressures on non-Chinese companies, including those in Korea.
The global solar market itself continues to experience high growth. The global new solar installation capacity in 2025 is expected to be 350GW, a 27% increase from the previous year, equivalent to 350 nuclear power plants. However, this market growth does not directly translate into improved profitability for module manufacturers. Instead, price competition due to oversupply is becoming more intense, threatening the survival of companies that lack economies of scale and cost competitiveness. In fact, over the course of 2024, more than ten solar module companies in Europe and the U.S. went bankrupt or ceased operations.
In conclusion, the investment value of HD Hyundai Group varies significantly depending on the position each affiliate holds within the renewable energy ecosystem. HD Hyundai Electric’s top score of 9.1 is due to its strong competitiveness in the high-value-added areas of power infrastructure and ESS. In contrast, HD Hyundai Energy Solutions’ score of 5.4 starkly illustrates the limitations of the solar module industry structure. Hyundai Heavy Industries and HD Hyundai Infracore have secured new growth drivers in eco-friendly shipbuilding and electrified construction equipment, respectively, earning high scores in the 8-point range. For investors, HD Hyundai Electric emerges as the most attractive investment within the group, thanks to its precise alignment with the megatrends of expanding global power infrastructure investment and ESS market growth.
**Disclaimer:** This analysis is intended for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Investment decisions should be made at the individual’s discretion and responsibility, and it is recommended to consult with a professional before investing.
