Chung Ki-sun, chairman of HD Hyundai (267250.KS), is rapidly expanding the group's business map from shipbuilding and construction equipment into future energy markets such as power infrastructure for artificial intelligence data centers and next-generation nuclear reactors, ahead of his first anniversary in the post on the 17th. HD Hyundai, which returned to owner-led management for the first time in 37 years with Chung's appointment, is seen as having laid a new foundation for growth over the past year through affiliate restructuring and large-scale investment in new businesses.
HD Hyundai posted consolidated revenue of 42.01 trillion won and operating profit of 6.96 trillion won in the first half of this year, according to the Financial Supervisory Service on the 15th. The figures mark the highest since the 2018 launch of Hyundai Heavy Industries Holdings, now HD Hyundai. Revenue rose 22.5% and operating profit jumped 187.0% from a year earlier. The results came one year after Chung took the helm of the group on Oct. 17 last year.
What draws more attention from the business community is not the numbers but the shift in the group's business landscape. At its center are power generation engines for AI data centers. HD Hyundai Heavy Industries (329180.KS) is targeting the North American data center power equipment market with its HiMSEN medium-speed engine, developed on the strength of technology accumulated in marine engines. As power demand has surged alongside expanding global investment in AI data centers, cumulative orders for the HiMSEN engine have topped 1.5 trillion won so far this year. HD Hyundai Heavy Industries plans to invest 833.6 billion won by 2028 to expand production facilities in Onsan-eup, Ulju-gun, Ulsan. Lee Jae-hyuk, an analyst at LS Securities (078020.KS), forecast that the HiMSEN capacity expansion would contribute $2.8 billion, or about 3.74 trillion won, in annual revenue. The company aims to expand engine production capacity to 7.2 gigawatts by 2030 by splitting roles between facilities, with the existing Ulsan plant producing marine engines and the new plant and HD Hyundai Engine in Yeongam, South Jeolla Province, producing engines for land-based power generation.
Engine sales lead into the maintenance business. HD Hyundai Marine Solution (443060.KS) expects up to 2 trillion won in revenue from engine maintenance and repair by 2030, and recently acquired U.S.-based Goltens for 331.5 billion won to that end. The company also decided to invest 238.6 billion won in building a dedicated facility for small modular reactors, which it has identified as a new growth driver. In total, 1.4 trillion won has been poured into new energy infrastructure businesses alone.
In shipbuilding, the group's core business, the merger of HD Hyundai Heavy Industries and HD Hyundai Mipo is seen as having improved efficiency. The plan is to combine the two companies' design and production capabilities and technology to secure competitiveness spanning large to mid-sized vessels, while raising naval shipbuilding capacity in preparation for the MASGA project, a Korea-U.S. shipbuilding cooperation initiative. The group has also built a three-way defense partnership structure, teaming up with Palantir of the U.S. on AI-powered smart shipyards, Anduril on unmanned vessels and Kiewit on ship construction and block work.
Weak orders for naval and special-purpose vessels, however, remain a disappointment. HD Hyundai Heavy Industries won $364 million, or about 486 billion won, in such orders in the first half of this year, just 12.1% of its annual target of $3.02 billion, or about 4 trillion won. Labor disputes, including a series of partial strikes and the rejection of a tentative wage and collective bargaining agreement, along with on-site safety management following a serious industrial accident at a shipyard, are also cited as immediate challenges.