Hyundai Motor's Q3 Earnings Expectations 'UP' with New Car Launches

Kiwoom Securities Report, Target Stock Price Up 20%
Goal to Sell 350,000 Units in US Market in Second Half

[Asia Economy Reporter Minji Lee] Hyundai Motor Company is expected to further increase its profits in the second half of the year through new car launches.

According to Kiwoom Securities on the 25th, reflecting strong second-quarter performance, the annual operating profit forecast for this year was raised by 49% from the previous estimate to 3.73 trillion KRW. The target stock price was also raised by 20% to 150,000 KRW.

[Image source=Yonhap News]

Hyundai Motor's second-quarter sales amounted to 21.86 trillion KRW, and operating profit was 590.3 billion KRW, down 19% and 52% respectively from the same period last year. This exceeded the market expectation of 319.1 billion KRW. Despite a 39% year-on-year decline in the company's global automobile sales in the second quarter due to the impact of COVID-19, improved product mix centered on Genesis and mid-to-large sedans in the domestic market led to performance improvement.

Domestic market sales reached 226,000 units, an increase of 13.5% compared to the previous year, and the proportion of high value-added sales rose by about 10% to 60%. The global sales share of Genesis in the second quarter increased by 3 percentage points year-on-year to 5.4%, and the domestic sales share rose by 8.1 percentage points to 16.2%, marking an all-time high.

The financial sector recorded 272 billion KRW, up 8.8% from the same period last year, due to installment asset growth in the U.S. market, exchange rate increases, and improved performance of Hyundai Card.

Kim Minseon, a researcher at Kiwoom Securities, said, "The main factors affecting the change in operating profit in the second quarter were decreased sales volume (-1.66 trillion KRW), product mix improvement (1.05 trillion KRW), and exchange rates (187 billion KRW). If there had been no industrial demand decline caused by COVID-19, operating profit of around 2 trillion KRW in the second quarter would have been possible."

Hyundai Motor plans to launch the Santa Fe, Tucson, G70, and GV70 in the second half of the year. In overseas markets such as the U.S., the GV80 and G80 will be launched, and sales growth and mix improvement momentum are expected to continue for the time being. The goal for the U.S. market in the second half is to sell 350,000 units, about 25% more than in the first half.

In emerging markets, Hyundai plans to actively respond through non-face-to-face and online vehicle sales support systems such as Click2But and Hyundai Express. Strategic new models such as the i20 (India) and Creta (Russia) will be launched, and sales demand normalization is expected after the third quarter.

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