[Click eStock] "Hyundai Wia, Emerging Future Business... Target Price Up 4.8%"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities on the 1st raised its investment opinion to 'Buy' and increased the target price for Hyundai Wia by 4.76%, from the previous 105,000 KRW to 110,000 KRW, stating that the future business segment is gradually becoming more visible.

Kim Minseon, a researcher at Kiwoom Securities, analyzed, "Q4 operating profit was 12.8 billion KRW, falling short of the market consensus of 40.6 billion KRW," adding, "One-time losses occurred from provisions for subcontractor employee lawsuits amounting to 7 billion KRW, a 10 billion KRW loss due to reduced operating rates at the Mexico plant responding to the Nu engine, 12 billion KRW reversal from the Shandong corporation, and a 7 billion KRW impairment loss from disposal of obsolete machinery inventory. Even excluding these, the outlook was below expectations."

It was particularly analyzed that the delayed recovery in China and Mexico and weakness in the machinery sector had a significant impact. However, improvements are expected from the increased operating rate at the Mexico plant due to handling of Hyundai and Kia Motors' North American engine recall replacements, gradual recovery of industrial demand in emerging markets (Russia, Brazil), volume response through mass production at the Russian engine plant in Q4 for Russia and Southeast Asia, and improved sales of Hyundai and Kia Motors in China.

The operating rates for major parts such as 4WD transmissions and constant velocity joints, aside from engines, are currently maintained at high levels, and it is expected that high operating rates will continue through the structural increase of 4WD vehicles like Genesis and SUVs, as well as supply to other OEMs including major electric vehicle companies for constant velocity joints.

The increasingly visible future business is also an area of expectation. Hyundai Wia plans to expand its role within the group’s future business by promoting the development of integrated thermal management systems for EV vehicles, hydrogen vehicle storage tanks and air compressors, and future mobility composite materials.

Recently, the company succeeded in securing orders for the E-GMP drive component thermal management module, raising expectations for its role in future mobility. Researcher Kim Minseon stated, "By 2025, we plan to continuously pursue the development of integrated thermal management systems including thermal management and interior air conditioning, hydrogen vehicle storage tanks and air compressors targeting the second generation of Nexo, and materials development for lightweight and high-strength future mobility."

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