[Click eStock] "Hyundai Motor, Expected Record Earnings with Production Normalization This Year"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities maintained its 'Buy' rating and target price of 300,000 KRW for Hyundai Motor Company on the 12th, expecting the company to record its highest performance this year due to the recovery of production stability.

Hyundai Motor's fourth-quarter results last year are expected to fall short of market consensus due to slow production recovery. NH Investment & Securities estimated Hyundai Motor's fourth-quarter revenue and operating profit at 29.5037 trillion KRW and 1.7193 trillion KRW, respectively. Researcher Jo Suhong of NH Investment & Securities stated, "Amid rising raw material prices, the biggest factor for the decline in profitability is believed to be the lack of support for top-line growth due to production disruptions," adding, "As production recovery proceeded slowly, global sales (deliveries) in the fourth quarter reached 952,000 units, falling short of the 978,000 units in the second quarter. Also, with the fourth-quarter closing exchange rate at 1,186 KRW, similar to the third quarter, it is expected that there was no reversal of sales warranty provisions, which is another factor lowering the operating profit forecast compared to previous estimates."

Performance improvement is expected this year due to the recovery of production stability. Researcher Jo analyzed, "The semiconductor supply issues and COVID-19 impacts, which were supply disruption factors last year, are expected to ease as the year progresses," and "Considering the historically low inventory levels, production stabilization is expected from the second quarter, when the successful effect of new models and the global launch effect of the Electric-Global Modular Platform (E-GMP) will be fully realized."

Record-high performance is anticipated this year. Hyundai Motor has set a global sales (wholesale) target of 4.32 million units this year, an increase of about 11.1% compared to the previous year. Researcher Jo said, "Excluding the underperforming China business, global sales this year are estimated to increase by 14.9% to 3.93 million units, which would be the highest sales volume on a consolidated basis," adding, "While global demand remains solid, inventory is only about one month’s worth, so sales revenue is expected to reach approximately 131 trillion KRW and operating profit 8.6 trillion KRW, marking the highest performance."

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