Hyosung Heavy Industries plunges around 10%...power equipment stocks broadly weaken [Stock NOW]

[Financial News] Shares of power equipment makers, including Hyosung Heavy Industries, are plunging across the board as concerns over tighter regulation of U.S. artificial intelligence (AI) data centers coincide with risk aversion in the South Korean stock market.
As of 9:50 a.m. on the 5th, Hyosung Heavy Industries was trading at 1,841,000 won, down 208,000 won (10.15%) from the previous trading day. HD Hyundai Electric was down 33,000 won (7.53%) at 405,500 won, while LS ELECTRIC was down 13,700 won (9.09%) at 137,000 won.
Hyosung Heavy Industries opened at 2,018,000 won before sliding to an intraday low of 1,824,000 won. HD Hyundai Electric began trading at 433,000 won and fell to 402,000 won, while LS ELECTRIC also dropped from its opening price of 150,700 won to an intraday low of 136,000 won.
Small- and mid-cap power equipment stocks are also weaker. Sanil Electric was trading at 133,100 won, down 21,900 won (14.13%), while ILJIN Electric was at 50,400 won, down 4,600 won (8.36%). Sanil Electric fell to an intraday low of 132,900 won, and ILJIN Electric to 50,000 won.
The possibility of tighter regulation of AI data centers following the U.S. midterm elections is seen as having dampened investor sentiment. The market appears to be factoring in concerns that regulatory debate over data centers’ large-scale power and water consumption and the burden of electricity costs could delay construction of new data centers and slow investment in AI infrastructure.
Power equipment makers have been seen as beneficiaries of rising demand for transformers and power distribution equipment as investment in AI data centers and power grids expands. Caution appears to be growing over the possibility that a slowdown in data center construction could also affect growth in new orders. The broader deterioration in investor sentiment in the South Korean market, with the KOSPI down more than 3% at the same time, is also seen as having amplified the declines.
With concerns over high valuations among power equipment stocks having grown recently, delays in revenue recognition for some projects and brokerages’ target-price adjustments have also been cited as factors adding to share-price volatility. However, some analysts say it is too early to conclude that the medium- to long-term industry outlook itself has been damaged, as major companies continue to expand production capacity in North America and expand their power equipment order intake.

[email protected] Lee Jeong-hwa Reporter