[Click eStock] "Hyundai Glovis Hesitated Due to Exchange Rates but Entered Earnings Recovery Phase"

Recovery in the Automotive Industry with Electric Vehicles and Hydrogen Economy
New Businesses Also Gain Momentum... Full-Scale Performance Growth by 2022

[Asia Economy Reporter Minwoo Lee] Hyundai Glovis is entering a full-scale earnings growth phase as Hyundai Motor Group's vehicle sales recover and global finished car logistics volume rebounds.

On the 26th, NH Investment & Securities maintained a 'Buy' rating on Hyundai Glovis and raised the target price by 18% to 265,000 KRW. The closing price the previous day was 227,500 KRW. Although short-term and this year's annual earnings may slightly miss expectations due to the decline in exchange rates, the automotive industry's recovery is expected to drive significant earnings improvement through next year. Researcher Yeonseung Jeong of NH Investment & Securities explained, "While the electrification market is expanding and the emergence of the hydrogen market presents new business opportunities for logistics companies, Hyundai Motor Group's proactive role in market changes has led Hyundai Glovis, a logistics company, to enter a phase of mid- to long-term business expansion expectations along with valuation expansion."

Expectations for new businesses are particularly rising. The government's hydrogen economy revitalization, the global electric vehicle market expansion, and Hyundai Motor's launch of an electric vehicle dedicated platform are expected to be factors for expanding Hyundai Glovis's new businesses such as hydrogen transportation and electric vehicle battery recycling. Additionally, overseas logistics business expansion is underway, including eco-friendly logistics projects with Thailand's CP Group and the expansion of the cold chain (temperature-controlled transportation of pharmaceuticals) business in Vietnam.

Researcher Jeong stated, "Hydrogen and used battery recycling businesses will have minimal immediate earnings contributions. These businesses have slow investment recovery speeds, but considering working capital and initial investment burdens, there are entry barriers, which represent opportunities for Hyundai Glovis."

However, he added that uncertainties remain due to potential changes in major shareholders' stakes and group governance during the restructuring process, which could increase stock price volatility. Researcher Jeong noted, "Current valuation reflects expectations of governance restructuring, so there is a valuation gap compared to 2013-2014 when the price-to-earnings ratio (PER) exceeded 20 times. With earnings growth and new business expectations through 2022, valuation expansion is sufficiently possible."

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