[EPS Prospects②] Semiconductor Shortage Surpassed with 'Sales Record'... Hyundai Motor Outlook

[Image source=Yonhap News]

[Asia Economy Reporter Lee Myunghwan] Despite the semiconductor supply shortage, Hyundai Motor, which recorded the highest-ever sales last year, is one of the representative stocks expected to have a higher earnings per share (EPS) growth rate than operating profit growth rate this year.

According to the securities industry on the 30th, Hyundai Motor's consolidated sales last year amounted to 117.6106 trillion KRW, an increase of 13.1% compared to the previous year. This is the highest sales ever recorded. Operating profit increased by 178.9% from the previous year to 6.6789 trillion KRW. Net profit rose 195.8% to 5.6931 trillion KRW.

During the same period, sales volume actually decreased due to the semiconductor supply shortage. In Korea, despite strong sales of new sports utility vehicles (SUVs) such as the Ioniq 5, Casper, and Genesis GV70, sales fell 8.9% year-on-year to 185,996 units. Overseas sales also dropped 17.2% year-on-year to 774,643 units. Hyundai explained that the reason sales decreased but revenue increased was because "the improvement in the sales mix centered on Genesis and electric vehicles offset the impact of the overall volume decline, resulting in increased sales."

Despite the record-high sales, the securities industry analyzed that the results fell short of market expectations. Kim Pyeongmo, a researcher at DB Financial Investment, said, "Hyundai Motor's fourth-quarter performance last year fell short of the lowered forecasts since the beginning of the year," adding, "Production disruptions led to sluggish sales and cost increases due to rising raw material prices caused the poor performance." Kim Dongha of Hanwha Investment & Securities diagnosed the reason for falling short of expectations as "a decline in profitability due to increased costs such as raw materials, logistics, and labor, as well as a sharp increase in corporate taxes."

Hyundai Motor's EPS forecasts for this year and next year were presented in the 20,000 KRW range. Samsung Securities predicted Hyundai Motor's EPS at 23,625 KRW this year and 24,216 KRW next year. DB Financial Investment projected EPS of 27,589 KRW this year and 28,694 KRW next year.

The securities industry diagnosed that a strategic change is necessary for Hyundai Motor. Researcher Kim Pyeongmo said, "To increase the multiple, it is urgent to raise the market share of electric vehicles and implement concrete future strategic changes," adding, "It is a time when strategic changes that overwhelm market expectations are needed." Samsung Securities researcher Lim Eunyoung also pointed out, "With the advent of the electric vehicle and data economy era, the business structure of automakers has begun to expand to insurance, energy storage systems (ESS), used cars, and services," emphasizing, "It is a time for an investment strategy centered on automakers."

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