Hyundai Electric's Q4 Earnings Hurt by One-Time Costs... "This Year Is Different"

[Asia Economy Reporter Park Jihwan] Daishin Securities stated on the 6th that Hyundai Electric recorded a loss in operating profit in the fourth quarter of last year due to one-time expenses, but a turnaround with strong performance is expected this year. They maintained a 'Buy' investment rating and a target price of 26,000 KRW.

Hyundai Electric's sales in the fourth quarter of last year were 607.6 billion KRW, a 24% increase compared to the previous year. However, operating profit turned to a loss of -41.7 billion KRW.

Sales showed a recovery trend reflecting deferred volumes (KEPCO 35 billion KRW, Middle East and Americas 20 billion KRW). On the other hand, operating profit turned negative due to the provision of 115.3 billion KRW for the Hyundai Heavy Industries Group's ordinary wage lawsuit. However, considering the provision for ordinary wages, the performance is evaluated as strong.

In particular, a turnaround is expected this year. Sales recovery has begun, and there is potential for a multiple increase related to new energy businesses. Sales are expected to increase by 9% year-on-year to 2.07 trillion KRW. Orders and margin improvements related to the Middle East and shipbuilding, a strong U.S. market, and growth in U.S. electric storage systems (ESS) are anticipated. The listing of group companies Hyundai Oilbank and Hyundai Samho Heavy Industries is being promoted, raising expectations for related businesses.

Researcher Lee Dongheon said, "New businesses such as ESS, smart energy solutions, and electric vehicle charging infrastructure have begun to materialize," adding, "The ordinary wage issue has been factored in, and considering growth since 2022, the stock price level has stabilized."

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