This article is for informational purposes only and is not financial advice. TheGatBull may earn a commission from some links at no cost to you — see our disclosure and full disclaimer.
This is not financial advice. One person’s view — not a recommendation to buy or sell anything.
The US market has already bought the AI power trade at close to perfection. GE Vernova (NYSE: GEV) hit a record $1,175 and trades near 63x forward earnings; Vertiv (NYSE: VRT) trades above 52x. Meanwhile, three Korean companies that ship transformers and switchgear into the same Big Tech data centers — Hyosung Heavy Industries (KRX: 298040), HD Hyundai Electric (KRX: 267260), and LS Electric (KRX: 010120) — sit roughly 40% below their highs while holding a record combined order backlog of ₩32.35 trillion (~$21.5B), about four to five years of work. Same demand, same customers, very different price tags. This post opens both ledgers.
The US side — what 63x already prices in
The four hyperscalers — Amazon, Google, Meta, and Microsoft — plan roughly $725 billion in combined capex for 2026, up 77% from $410 billion last year. Reddit calls it “incinerating capital.” Fine — but if that fire burns money, the money lands somewhere. A data center is, at the end of the day, a power project. Every gigawatt needs transformers, switchgear, and distribution panels, and those show up as revenue on someone’s books.
Wall Street has already bought the American names on that receiving end. GE Vernova booked more orders in one quarter than in all of last year, and the stock trades at roughly 58–63x next-twelve-month earnings. Vertiv — cooling and power infrastructure — is above 52x. Eaton (NYSE: ETN), the “cheap” one, is near 32x. Flawless execution, unbroken demand, and zero tariff surprises: all of it is already in the price.
🎩 Under the Gat — 63x leaves you with one question: what has to get even better from here for the stock to go up?
The bridge — same data center, same transformer, different exchange
Here’s what rarely shows up on a US investor’s screen: a large share of the ultra-high-voltage transformers and switchgear going into those data centers is made in Korea. US transformer lead times have stretched to multiple years in a seller’s market — which means the ability to deliver sooner has become a moat in itself. Koreans have a word for this kind of execution speed: ppalli-ppalli (“hurry-hurry”) — a work culture that, for the first time, is showing up as a line item in a valuation debate.
The evidence keeps showing up in regulatory filings. On July 2, HD Hyundai Electric disclosed a long-term supply agreement worth up to ₩1.12 trillion (~$750M) with a global Big Tech firm building North American data centers — and raised its 2026 order guidance from $4.2 billion to $5.2 billion. LS Electric booked five consecutive Big Tech and AI data center orders in Q2 alone. Hyosung Heavy Industries signed a ₩310 billion (~$210M) long-term contract for ultra-high-voltage transformers with AusNet, the Australian grid operator. (We took apart the HD Hyundai Electric filing line by line here.)
The Korean side — record backlog, 40% off the highs
| Order backlog (Q1 2026) | Note | |
|---|---|---|
| Hyosung Heavy Industries | ₩15.1T (~$10B) | Largest of the three |
| HD Hyundai Electric | $7.89B (≈₩11.6T as reported) | Record FY2025 operating margin of 27.6% |
| LS Electric | ₩5.64T (~$3.8B) | Five straight Big Tech orders in Q2 |
| Combined | ≈₩32.35T (~$21.5B) | All-time high — roughly 4–5 years of work |
Industry watchers now expect the combined backlog to pass ₩40 trillion (~$27B) within the year if order momentum holds. And yet all three stocks trade roughly 40% below their peaks. The backlog and the share prices went in opposite directions.
There’s a domestic anchor forming too. SK hynix — which debuted on Nasdaq on July 10 under the when-issued ticker SKHYV, closing its first day at $168.31, up 12.96% from its $149 offer price (regular trading as SKHY starts July 13) — raised $26.5 billion (≈₩40T), all of it earmarked for capex. The Yongin mega-cluster that money helps build will need an estimated 15–16 GW at full operation — about a quarter of the Seoul metro area’s power demand — and of the 6 GW SK hynix needs, only about 3 GW has a confirmed supply plan so far. Export demand (US grid plus data centers) with domestic gigawatts stacked on top. (Our breakdown of the SKHY filing is here.)
Side by side — the US receivers vs. the Korean receivers
| GE Vernova / Vertiv / Eaton | Hyosung / HD Hyundai Electric / LS Electric | |
|---|---|---|
| Business | Gas turbines, grid, cooling & power infrastructure | Ultra-high-voltage transformers, switchgear, distribution |
| Customers | US utilities, hyperscalers | The same hyperscalers + US utilities + Korean domestic demand |
| Valuation | ~63x / 52x+ / ~32x forward | Deep discount to US peers |
| Share price | At or near record highs | Roughly 40% below peaks |
| Backlog | GEV: one quarter’s orders > all of last year | Combined ₩32.35T (~$21.5B), all-time high |
| Key difference | US listing, pure-play premium | No US ADR — access itself is part of the discount |
Not a perfect parallel — GE Vernova includes gas turbines and nuclear services, Vertiv includes cooling, and the Korean trio is concentrated in transformers and distribution. Read them as different layers of the same demand.
The counterargument — this discount has reasons
Before anyone chases the gap, the bear side deserves a fair hearing:
- Access. None of the three has a US ADR. For US investors, the routes are Interactive Brokers’ direct KRX access or indirect exposure via EWY (how to buy Korean stocks from the US). Stocks that are hard to buy trade cheap — that’s half of what the “Korea discount” actually is.
- Tariffs and currency. With heavy US revenue exposure, tariff policy and the ₩/$ rate can move margins after contracts are signed.
- Peak-cycle worry. All three are expanding capacity. A 4–5 year backlog, flipped around, is also a suspicion that this is the margin peak.
- The US premium isn’t irrational. GE Vernova and Vertiv carry real premium drivers — local production, pure-play exposure, index flows. Not all of the gap is mispricing.
🎩 Under the Gat — Big Tech is “incinerating capital”? Then ask who’s standing next to the fire, getting warm. But remember the order of events: Wall Street bought the American receivers first, at prices that assume perfection, while the Korean receivers are still stacking invoices. Three things could close this gap — quarterly earnings turning backlog into profit, credit-rating and analyst-coverage upgrades, and a steady drumbeat of order disclosures. Three things could keep it open — no ADR, tariffs, and cycle fear. I won’t tell you which side wins. I’ll just say the truth lives somewhere between 63x and 40%-off, and it shows up as numbers next earnings season. A view, not advice.
What to watch
- Q2 earnings (late July–early August). The first checkpoint on how fast backlog converts into profit.
- Order cadence. Whether LS Electric’s streak of Big Tech wins continues into Q3.
- US multiples. If GEV or VRT stumbles, the gap can close the other way — with the US side coming down.
- Overlap check. EWY holders already own small positions in all three (what’s actually inside EWY). Count your exposure before doubling it.
FAQ
How can US investors buy these three Korean stocks?
There’s no US ADR for any of them. Interactive Brokers opened direct KRX access in May 2026, and EWY offers indirect exposure. Full walkthrough: how to buy Korean stocks from the US.
Why did the gap open now?
US AI power names re-rated to record highs through 2026 while Korea’s trio corrected on tariffs, currency, and profit-taking — even as backlogs kept setting records.
Isn’t a 4–5 year backlog automatically good?
Backlog is revenue visibility, not a margin guarantee. Materials, currency, and tariffs move after signing. Watch backlog quality — fixed-price vs. indexed — in earnings reports.
Is the Korean trio the same trade as GE Vernova?
No. Different layers. The trio is concentrated in the grid’s bottleneck — transformers and distribution. Map of the whole Korean AI power chain: the pillar guide.
Sources
- Statista / Tom’s Hardware / CNBC — Big Tech 2026 capex $725B, +77% YoY
- TIKR / 24/7 Wall St. — GE Vernova record $1,175, ~63x NTM; quarterly orders exceeding last year’s total
- Yahoo Finance — Vertiv forward P/E 52x+; Eaton ~32x
- AlphaBiz / Seoul Economic Daily / AJU Press — combined trio backlog ₩32.35T (Hyosung ₩15.1T, HD Hyundai Electric $7.89B, LS Electric ₩5.64T), 4–5 years of work, ₩40T outlook
- Reuters — HD Hyundai Electric 2026 order guidance raised to $5.2B
- Invest Chosun (July 8, 2026) — trio ~40% below peaks; LS Electric five straight orders; Hyosung–AusNet ₩310B; HD Hyundai Electric ₩1.12T Big Tech contract
- Tom’s Hardware — Yongin cluster 15–16 GW (~25% of Seoul metro demand), SK hynix 3 of 6 GW secured
- Bloomberg / Investing.com / Shacknews — SKHY: $149 offer, $26.5B raised, first-day close $168.31 (+12.96%), regular trading July 13
Disclaimer: This article is for information and education only and is not financial advice. Backlogs, valuations, tariffs, and exchange rates change — verify current figures before acting. ₩/$ conversions use approximately ₩1,500 per dollar (July 10, 2026 close); component backlog figures reflect FX rates on their original reporting dates. The author may hold positions in securities mentioned. Do your own research.
Frequently Asked Questions
How can US investors buy Hyosung Heavy Industries, HD Hyundai Electric, or LS Electric?
None of the three has a US ADR. The realistic routes are Interactive Brokers’ direct KRX access (opened May 2026) or indirect exposure through Korea ETFs like EWY.
Why did this valuation gap open up now?
US AI power stocks re-rated to record highs through 2026, while Korea’s trio corrected roughly 40% from their peaks on tariff, currency, and profit-taking pressure — even as their combined backlog kept hitting records.
Isn’t a 4-5 year order backlog automatically bullish?
A backlog is revenue visibility, not a margin guarantee. Materials, currency, and tariffs can move after contracts are signed. The quality of the backlog — fixed-price vs. indexed — shows up in quarterly earnings.
Is buying the Korean trio the same exposure as buying GE Vernova?
No. GE Vernova includes gas turbines and nuclear services, and Vertiv includes cooling. The Korean trio is concentrated in one layer: ultra-high-voltage transformers and switchgear — the grid’s bottleneck.
This article is for informational purposes only and is not financial advice. TheGatBull may earn a commission from some links at no cost to you — see our disclosure and full disclaimer.