[Click eStock] Hyundai Wia, Lower Operating Rate Target in China... Earnings Recovery Possible from Second Half

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Financial Investment maintained its 'Buy' rating and target price of 90,000 KRW for Hyundai Wia on the 4th, stating that the improvement in earnings is expected to be limited.

Jung Yong-jin, a researcher at Shinhan Financial Investment, said, "The earnings improvement of Hyundai Wia, which is highly dependent on the recovery of volume in China, is expected to be limited."

Researcher Jung explained, "Looking at the wholesale sales targets in China this year, Hyundai Motor announced 370,000 units (+3.1%) and Kia 190,000 units (+45.7%). In Kia's case, the base sales in 2021 were low, so the growth rate appears large, but the actual operating rate target is low."

However, Researcher Jung forecasted that the volume recovery outside of China would gain momentum.

He analyzed, "Among the automotive parts portfolio, profitable products such as constant velocity joints and four-wheel drive products will continue to grow, and gradual earnings improvement is expected in the first half of this year. From the second half, with the improvement of operating rates in China and the achievement of the break-even point (BEP) at the Russian engine plant, a full-scale earnings recovery will be possible."

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