[Click eStock] "Hyundai Mobis Falls Short of 2Q Expectations... Full-Scale Improvement from Second Half"

2Q Operating Profit Expected to Fall 3.4% Short of Market Forecast
Performance Improvement Anticipated from Second Half Due to Increased Electric Vehicle Production

[Asia Economy Reporter Minwoo Lee] Hyundai Mobis is expected to record earnings below expectations in the second quarter of this year due to lower-than-anticipated production in China and the impact of reduced production of compact cars. From the second half of the year, as the production of drive motors, which faced setbacks in the first half, normalizes and electrification sales increase due to the expansion of eco-friendly vehicle production by client companies, an improvement in performance is expected.

On the 14th, Hana Financial Investment maintained its 'Buy' rating and target price of 370,000 KRW for Hyundai Mobis based on these factors. The closing price the previous day was 284,000 KRW. It also forecasted consolidated sales of 10.03 trillion KRW and operating profit of 585.1 billion KRW for the second quarter of this year. These figures represent increases of 33% and 247%, respectively, compared to the second quarter of last year, but the operating profit is about 3.4% below market consensus. According to financial information provider FnGuide, Hyundai Mobis's market consensus is 10.3188 trillion KRW in sales and 605.1 billion KRW in operating profit.

Researcher Seonjae Song of Hana Financial Investment explained, "Although the growth rate is large due to the low base in the second quarter of last year, the production of client companies in China has been sluggish, resulting in lower-than-expected parts manufacturing and module assembly sales." He added, "Electrification sales are also expected to increase by 35%, lower than the average growth rate of 59% over the past four quarters, because the growth rate of eco-friendly vehicle production by client companies has decreased to 28%, and parts supply for the electric vehicle platform E-GMP is less than expected due to production setbacks." However, after-sales parts sales are estimated to increase by 25% due to the base effect from the second quarter of last year despite unfavorable exchange rates.

Performance is expected to improve gradually from the second half of the year as the production of drive motors, which faced setbacks in the first half, increases. Additionally, electrification sales are expected to rise, supported by increased shipments of Hyundai's Ioniq 5, Kia's EV6, and new electric vehicle launches from Hyundai Genesis. The imbalance in vehicle semiconductor supply is also easing, and module assembly sales are expected to increase due to new vehicle launches by client companies.

Furthermore, Hyundai Mobis's preparations for the autonomous electric vehicle era have been positively evaluated. The company is building a technology development portfolio that supports strengthening capabilities within the group. It is currently producing its own electric vehicle drive systems and developing autonomous driving-related sensors, high-performance control platforms, and software (SW) architectures. It is also preparing hydrogen fuel cell systems (MEA, stack) for hydrogen vehicles and electrified propulsion systems related to urban air mobility (UAM). Collaborations with external automotive parts and IT companies are also underway.

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