[Click eStock] Hyundai Mobis Announces New Shareholder Return Policy... Reaffirms Commitment to Boost Stock Price

[Asia Economy Reporter Kwon Jae-hee] Korea Investment & Securities maintained a 'Buy' rating on Hyundai Mobis on the 21st, setting a target price of 320,000 KRW.

Hyundai Mobis announced a new shareholder return policy after the market closed on the 17th. The core elements are dividends and share repurchases and cancellations.

Previously, Hyundai Mobis's three-year shareholder return policy announced in February 2019 also focused on dividends and share repurchases and cancellations, all of which were executed as planned. The dividend policy centered on setting dividends at 20-40% of free cash flow (FCF) and introducing interim dividends. Over three years, the company repurchased shares worth about 1 trillion KRW and canceled shares totaling 647.5 billion KRW.

Jinwoo Kim, a researcher at Korea Investment & Securities, stated, "The core of the newly announced shareholder return policy is also dividends and share repurchases and cancellations, with the dividend payout ratio adjusted to 20-30% while maintaining interim dividends."

This year, Hyundai Mobis plans to repurchase shares worth 330 billion KRW and cancel 19% of them, amounting to 62.5 billion KRW. In addition to shareholder returns, the company aims to manage stock returns to increase total shareholder return (TSR). Over the next three years, it plans to invest 3 to 4 trillion KRW in electrification and core components and another 3 to 4 trillion KRW in future growth engines such as semiconductors, software, and autonomous driving. Furthermore, Kim Hwajin, a governance expert and professor at Seoul National University Law School, was appointed as a new outside director.

Jinwoo Kim of Korea Investment & Securities evaluated, "Hyundai Mobis has once again demonstrated its commitment to shareholder returns through faithful execution of the previous shareholder return policy," adding, "The diversity of the board composition stands out the most among major affiliates within the Hyundai Motor Group."

However, Kim added, "Stock returns have been relatively sluggish. The market still interprets the stock underperformance from a governance perspective, so improving earnings is key to overcoming this."

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