1、Korea Electrical Equipment:Multi-year strong demand within sightANCHOR REPORTGlobal Markets Research9 November 2024We see further upside for K-LPT manufacturersWe expect the secular growth of Koreas electrical equipment industry to be driven by:1)replacement of outdated electricity infrastructure;2)

2、more grid connections required for renewable energy projects;and 3)increasing electricity demand for AI,data centers,and EV charging systems.In the past,Europe was most proactive in adopting clean energy,and currently it has the highest contribution of renewables in electricity generation.According

3、to BNEF,the US would have strong demand until 2030E,as majority of the LPTs(large power transformer)in the US are almost 40-70 years old(installed in the 1950s-1980s).Korea LPT(K-LPT)manufacturers will be one of the biggest beneficiaries globally,in our view,considering:1)the US imports a significan

4、t LPTs from Korea;2)HDHE and HHI have LPT manufacturing sites in the US;and 3)the US had banned the imports of Chinese LPTs due to cybersecurity issues during the Trump administration in 2020,and now levyes a 25%anti-dumping duty.We initiate coverage of HD Hyundai Electric(HDHE;267260 KS,Buy),Hyosun

5、g Heavy Industries(HHI;298040 KS,Buy)and LS Electric(LSE;010120 KS,Buy).HDHE and HHI have large LPT manufacturing capacities in the US,while LSE has a well-diversified business portfolio from transmission to distribution.Among K-LPT players,our top pick is HDHE,as it is a pure-player with a strong t

6、rack record.Research AnalystsKorea RenewablesSiwoo Kim -NFIK+822 3783 2334See Appendix A-1 for analyst certification,important disclosures and the status of non-US analysts.Production Complete:2024-11-10 20:18 UTCEQUITY:POWER&UTILITIESKorea Electrical EquipmentGlobal Markets Research9 November 2024M