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After Leaping 39% Hyosung Heavy Industries Corporation (KRX:298040) Shares Are Not Flying Under The Radar

Simply Wall St · 06/21 23:10

Hyosung Heavy Industries Corporation (KRX:298040) shares have continued their recent momentum with a 39% gain in the last month alone. The annual gain comes to 120% following the latest surge, making investors sit up and take notice.

After such a large jump in price, Hyosung Heavy Industries' price-to-earnings (or "P/E") ratio of 25.4x might make it look like a strong sell right now compared to the market in Korea, where around half of the companies have P/E ratios below 13x and even P/E's below 7x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.

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Hyosung Heavy Industries certainly has been doing a good job lately as it's been growing earnings more than most other companies. It seems that many are expecting the strong earnings performance to persist, which has raised the P/E. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

View our latest analysis for Hyosung Heavy Industries

pe-multiple-vs-industry
KOSE:A298040 Price to Earnings Ratio vs Industry June 21st 2025
Want the full picture on analyst estimates for the company? Then our free report on Hyosung Heavy Industries will help you uncover what's on the horizon.

How Is Hyosung Heavy Industries' Growth Trending?

The only time you'd be truly comfortable seeing a P/E as steep as Hyosung Heavy Industries' is when the company's growth is on track to outshine the market decidedly.

Retrospectively, the last year delivered an exceptional 98% gain to the company's bottom line. The latest three year period has also seen an excellent 898% overall rise in EPS, aided by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.

Looking ahead now, EPS is anticipated to climb by 26% per annum during the coming three years according to the analysts following the company. Meanwhile, the rest of the market is forecast to only expand by 18% per year, which is noticeably less attractive.

With this information, we can see why Hyosung Heavy Industries is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

The Key Takeaway

The strong share price surge has got Hyosung Heavy Industries' P/E rushing to great heights as well. Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

As we suspected, our examination of Hyosung Heavy Industries' analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.

A lot of potential risks can sit within a company's balance sheet. Our free balance sheet analysis for Hyosung Heavy Industries with six simple checks will allow you to discover any risks that could be an issue.

It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).