[Click eStock] "Mando, Increased Expectations for This Year's Performance Due to Overseas Orders Potential"

Mando Hella Acquisition Expected to Boost Overseas Orders Further

[Asia Economy Reporter Minwoo Lee] Mando's acquisition of 100% stake in Mando Hella has increased the possibility of overseas orders. Accordingly, there is a forecast that this year’s record-high performance is also achievable.

On the 25th, Daishin Securities gave Mando a 'Buy' investment rating and set a target price of 95,000 KRW, citing this background. The closing price the previous day was 63,100 KRW.

In the fourth quarter of last year, Mando recorded consolidated sales of 1.7385 trillion KRW and operating profit of 80.4 billion KRW. These represent increases of 6.3% and 27.9%, respectively, compared to the same period last year. The operating profit fell short of market consensus by 13.96%, due to a one-time bad debt provision of about 15 billion KRW arising from Ssangyong Motor and Sacheon Motor.

Daishin Securities expects Mando to overcome this and achieve consolidated sales of 6.249 trillion KRW and operating profit of 362 billion KRW this year, marking an all-time high. In particular, the acquisition of 100% stake in Mando Hella is expected to be effective.

Earlier, on the 3rd, Mando announced it would acquire 100% of Mando Hella Electronics for 165 billion KRW. It decided to acquire the entire stake held equally by Germany’s Hella and Halla Holdings. Established in 2008, Mando Hella Electronics is a specialized company in autonomous driving and electronic components. It designs and manufactures core parts related to driver assistance systems (ADAS) and electronic control, such as radar and cameras (ECU).

Seunghwan Lee, a researcher at Daishin Securities, explained, "With the acquisition of Mando Hella, the operating profit margin could increase by 0.2% in the short term this year, and the possibility of overseas orders from major automakers will increase for products that include radar and ADAS technology owned by Mando Hella."

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