[Click eStock] "Hyundai Mobis, Delay in Electrification Profitability Improvement"... Target Price Down 11.8%

[Asia Economy Reporter Ji Yeon-jin] Heungkuk Securities announced on the 29th that it has lowered the target price for Hyundai Mobis by 11.8% to 340,000 KRW, considering the delayed profitability improvement in electrification and the operating profit margin (OPM) compared to global competitors. The buy investment rating was maintained.

Hyundai Mobis reported third-quarter sales this year of 10 trillion KRW, the same as the previous year, and operating profit of 457.5 billion KRW, a decrease of 23.5%. This was due to increased fixed cost burdens from the decline in finished vehicle operating rates, as well as rising costs such as raw materials. By segment, the parts and modules division recorded an operating loss of 33.3 billion KRW, turning to a deficit, while the A/S division's operating profit increased by 21.6% to 490.8 billion KRW. In the parts and modules division, impacts included volume (-43 billion KRW), transportation costs (-40 billion KRW), labor costs (-37 billion KRW), and raw material increases (-20 billion KRW) compared to the previous year; in the A/S division, transportation costs (-70 billion KRW) and exchange rates (-18 billion KRW) were reflected.

From the fourth quarter of this year, sales and margin increases are expected due to increased sales of Hyundai and Kia vehicles and favorable exchange rate effects.

Kim Gwi-yeon, a researcher at Heungkuk Securities, stated, "As global bottlenecks and inflation persist, the impact of raw materials and transportation costs is expected to continue to some extent through the fourth quarter and the first half of next year," adding, "the importance of the timing when profitability in the electrification segment, currently estimated to be recording a slight profit, becomes visible is expected to increase."

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