Hyundai Motor Group Stocks, Younger Siblings Lag Behind as Eldest Runs

[Asia Economy Reporter Koh Hyung-kwang] The market capitalization of the three Hyundai Motor Group companies?Hyundai Motor, Kia Motors, and Hyundai Mobis?has shown mixed results since the beginning of the year. While the 'eldest brother,' Hyundai Motor, saw a significant increase in market cap and continued its upward trend, the 'younger siblings,' Kia Motors and Hyundai Mobis, either stagnated or declined.

According to the Korea Exchange on the 31st, Hyundai Motor's market capitalization was recorded at 36.7509 trillion KRW as of the closing price on the 28th (172,000 KRW per share). This represents a 45.8% (11.5381 trillion KRW) increase compared to the market cap of 25.2128 trillion KRW at the start of the year. In contrast, Kia Motors' market cap only rose by 0.6% (101.3 billion KRW), from 17.2279 trillion KRW to 17.3292 trillion KRW during the same period. Even more notably, Hyundai Mobis' market cap decreased by 8.7% (2.1061 trillion KRW), falling from 23.5884 trillion KRW to 21.4823 trillion KRW.

Compared to the sharp stock price drop caused by the COVID-19 pandemic in March, the gap between the eldest and younger siblings has widened further. On March 19, when the KOSPI hit its yearly low, Hyundai Motor's market cap dropped to 14.0807 trillion KRW but recovered to 36.7509 trillion KRW by the 28th of this month, marking a 161% (22.6702 trillion KRW) increase during this period. However, Kia Motors (9.1409 trillion KRW → 17.3292 trillion KRW) and Hyundai Mobis (12.2620 trillion KRW → 21.4823 trillion KRW) only increased by 89.6% (8.1883 trillion KRW) and 75.2% (9.2203 trillion KRW), respectively, over the same timeframe.

The sharp rise in Hyundai Motor's market cap is attributed to its better-than-expected second-quarter earnings and the anticipation of improved future performance driven by increased new car sales. Kim Min-seon, a researcher at Kiwoom Securities, commented, "Recently, Hyundai Motor's stock price surged following strong second-quarter results that exceeded market expectations and hopeful reports of collaboration with hydrogen truck maker Nikola. Especially, the faster new car cycle compared to global competitors expected to continue next year provides grounds for optimism about long-term strong performance."

Eugene Investment & Securities has set a target price of 200,000 KRW for Hyundai Motor, expecting a reevaluation of the value of its hydrogen and electric vehicle businesses. Lee Jae-il, a researcher at Eugene Securities, said, "Hyundai Motor's hydrogen vehicle sales are expected to increase by 66%, from 12,000 units this year to 20,000 units next year. After entering the big electric vehicle cycle next year, additional stock price upside is possible due to a reevaluation of the electric vehicle segment's value."

There are also forecasts that the stock prices of the three Hyundai Motor Group companies will rise together in the future. Jung Yong-jin, a researcher at Shinhan Financial Investment, stated, "It is widely known that Hyundai Motor Group is performing well in the next-generation automobile markets of electric and hydrogen vehicles, but this capability has not yet been reflected in the stock prices in the capital market. Since traditional automakers' capabilities are still needed and Hyundai Motor Group holds a gap over new entrants in next-generation technologies, the valuation of Hyundai Motor Group is expected to expand."

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