[Click eStock] Hyundai Corporation 1Q Operating Profit 11.6 Billion Won... "Revenue Decreased but Profit Margin Maintained"

Stablely Overcoming Crisis... Steady Orders from Hyundai Motor Company

New Hyundai Corporation CI

[Asia Economy Reporter Minwoo Lee] Due to the impact of the new coronavirus infection (COVID-19) and other economic slowdowns, Hyundai Corporation's performance in the first quarter of this year is expected to decrease in scale compared to the previous year. However, profit margins are maintained, and it is evaluated that the company is passing through the crisis stably.

On the 3rd, Hana Financial Investment forecasted that Hyundai Corporation would achieve sales of 1.0705 trillion KRW and an operating profit of 11.6 billion KRW in the first quarter of this year. This represents a decrease of 5.9% and 5.5%, respectively, compared to the same period last year. Considering the sales decline trend observed in the second half of last year, it is expected that the scale will remain sluggish through the first quarter. Researcher Jaeseon Yoo of Hana Financial Investment explained, "However, this should be understood as a result of proactively avoiding risks with low-profit trading partners from the perspective of profitability management," adding, "The operating profit margin is still maintained at 1.1%, and profits are expected to improve through scale growth centered on vehicle materials in the second half."

Recently, Hyundai Motor Company signed a large bus supply contract with the Turkmenistan Ministry of Transport, which is also positive. The contract is for 400 units, with a contract amount of approximately 60 million USD (about 73.7 billion KRW), and the scheduled shipment period is from July to November. Assuming no production delays and that both sales and profits are recognized, it is analyzed that Hyundai Corporation can achieve scale growth this year. Furthermore, if additional supply contracts are signed, related sales could continue until next year.

For these reasons, Hana Financial Investment gave Hyundai Corporation a 'Buy' investment rating with a target price of 16,000 KRW. The closing price on the previous day was 10,750 KRW. Researcher Yoo stated, "Although positive market conditions were expected after the easing of trade disputes, concerns about decreased demand in emerging countries have emerged due to the spread of COVID-19 and the impact of international oil prices," adding, "While it cannot be denied that trade conditions may worsen, due to the nature of the trading industry, the value of existing networks may be highlighted amid the general contraction of trading partners, so if COVID-19 eases, market conditions and investment sentiment are expected to improve."

This content was produced with the assistance of AI translation services.