Big Spenders' Love for 'Hyundai Motor·Kia' Good Good

Stock Price Rises Amid Continuous Love Calls
Bright Outlook for Q4

[Asia Economy Reporter Minji Lee] Due to continuous love calls from major investors, the stock prices of Hyundai Motor and Kia are on the rise. The securities industry has expanded its outlook on stock price increases, expecting solid earnings driven by improvements in semiconductor supply and rising selling prices.

According to the Korea Exchange on the 10th, Kia's stock price rose more than 11% from 78,300 KRW on the 1st of last month to 87,000 KRW as of the previous day. Hyundai Motor's stock price also showed a double-digit increase from 193,500 KRW to 213,000 KRW during the same period, significantly outperforming the KOSPI fluctuation rate (-1.87%).

The stock price was supported as foreigners and institutions actively purchased shares. Since last month, foreigners bought 370.8 billion KRW worth of Kia shares and 206.8 billion KRW worth of Hyundai Motor shares, while institutions also net purchased 218 billion KRW and 187.8 billion KRW worth of shares of the two companies, respectively. The combined net purchase amounts of foreigners and institutions were 588.8 billion KRW and 394.7 billion KRW, ranking 3rd and 5th respectively in net purchase stock rankings. Due to the semiconductor supply shortage, from July to September, foreigners and institutions had net sold Hyundai Motor shares worth 620.9 billion KRW and 807.7 billion KRW respectively, making it the third most sold domestic stock.

The easing of uncertainty regarding production disruptions and favorable earnings outlooks are interpreted as factors that changed investor sentiment. According to the recently released global wholesale sales volume of Hyundai and Kia for October, the number recorded was 525,000 units, down 20% compared to last year due to the semiconductor supply shortage. However, the market is expressing the view that "this is the bottom," raising expectations that wholesale sales will improve from the fourth quarter. Soohong Cho, a researcher at NH Investment & Securities, explained, "Production disruptions were inevitable this year, but production hit its bottom in September and wholesale sales in October," adding, "Although the logistics crisis will take time, it is ultimately a solvable problem, and more attention should be paid to the fact that the automobile demand base is solid."

The securities industry expects that finished car manufacturers like Hyundai Motor and Kia will defend profitability through improved product mix with increased average selling prices compared to parts suppliers. Due to tight supply schedules against abundant demand, incentives and inventory levels have fallen to their lowest levels, which can enhance earnings stability. The estimated operating profit for Hyundai Motor and Kia in the fourth quarter is projected at 1.954 trillion KRW and 1.5089 trillion KRW, respectively, representing increases of 17.74% and 55.77% compared to a year ago. Moonjun Jang, a researcher at Hyundai Motor Securities, forecasted, "Finished car manufacturers will maintain and improve high profitability by benefiting from average selling price and mix improvement effects as well as supply expansion," adding, "Parts suppliers may temporarily gain operational recovery momentum in the phase where finished car manufacturers' supply chain policies clearly focus on securing safety stock."

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