[Click eStock] Mando, Expected Success in Diversifying Sales Channels

[Asia Economy Reporter Lee Seon-ae] Hi Investment & Securities announced on the 1st that it maintains a buy rating on Mando and raises the target price to 85,000 KRW. It is attractive that the company has secured customers with a steady production increase trend despite the ongoing vehicle semiconductor shortage.

Shin Yoon-chul, a researcher at Hi Investment & Securities, said, "Recently, by securing a North American electric pickup truck OEM as a new customer and successfully winning projects focused on electronic components such as EPB, EPS, and ADAS, we can expect upward momentum." He added, "Furthermore, the volume for North American electric vehicle OEMs in 2022 is expected to expand by more than 50% compared to this year. Considering that the company's profitability improves as the BEV mix increases, it is a good time to raise expectations for the 2022 earnings per share (EPS)."

The fourth-quarter performance is expected to record sales of 1.76 trillion KRW (YoY +1.0%, QoQ +22.3%) and operating profit of 99.6 billion KRW (YoY +23.9%, QoQ +87.3%). Growth is expected to continue in the Chinese and Indian markets following the third quarter, and especially in the domestic and U.S. markets, which recorded negative growth compared to the same period last year in the third quarter, growth is expected to resume thanks to efforts to normalize the operating rates of major customers.

The earnings increase effect of HL Klemove is also expected to normalize to the level of the second quarter. On December 1, the subsidiary HL Klemove is scheduled to merge with Mando Mobility Solutions (MMS), an autonomous driving specialized subsidiary based on Mando's ADAS division. Subsequently, an Investor Day will be held in December to share the mid- to long-term roadmap related to the autonomous driving business.

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