[Click eStock] "Hyundai Motor to Easily Overcome Semiconductor Shortage"

KB Securities "Maintain Hyundai Motor Target Price at 300,000 KRW"
Operating Profit Expected to Reach 1.9 Trillion KRW in Q2 This Year

[Asia Economy Reporter Gong Byung-sun] Although semiconductor supply issues persist, Hyundai Motor Company is analyzed to be in a relatively favorable situation compared to its competitors. There are even opinions that benefits such as eased competition due to production disruptions at rival companies may continue. KB Securities maintained a target price of 300,000 KRW and a 'Buy' investment rating for Hyundai Motor.

According to KB Securities on the 16th, Hyundai Motor's semiconductor supply issues are expected to continue for the time being. Inventory is rapidly depleting in the U.S. and domestic markets. There are concerns that the lack of inventory could negatively impact sales.

However, KB Securities' analysis states that production disruptions caused by semiconductor shortages are a common difficulty faced by all major global original equipment manufacturers (OEMs). KB Securities researcher Kang Sung-jin explained, "Although there are differences in production disruptions among companies, Hyundai Motor is considered a relatively favorable company," adding, "Excluding China, the global market share rose from 6.4% in the first quarter of this year to 7.3% in April." It is a situation where benefits such as eased competition can be expected due to production disruptions at competitors.

As a risk factor in investment, the delay in profitability improvement was pointed out. Researcher Kang said, "Cash outflows related to investments are increasing due to intensified competition in future technologies such as electric vehicles, which may delay profitability improvement," and added, "Rising raw material prices may also shrink contribution margin per vehicle." Furthermore, he added, "The appreciation of the Korean won may lead to a downward revision of this year's operating profit forecast."

KB Securities forecast Hyundai Motor's operating profit for the second quarter of this year to be revised upward from the previous estimate of 65.3 billion KRW to 1.9 trillion KRW. This exceeds the market consensus by 2.9%. Despite semiconductor issues, global automobile sales excluding China from April to May were 0.5% higher than previously expected, and the model mix was also better than anticipated.

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