[Click eStock] "HL Mando, Continued Top-Line Growth in Second Half... 2Q Profitability Improvement"

NH Investment & Securities maintained a Buy rating and a target price of 68,000 KRW for HL Mando on the 27th, citing expectations for medium- to long-term profitability improvement.

HL Mando's sales in the second quarter of this year rose 24.3% year-on-year to 2.0868 trillion KRW, and operating profit increased 68.5% to 77 billion KRW. Operating profit slightly missed expectations, and pre-tax profit was lower than anticipated due to increased financial costs from rising interest rates. However, adjusted operating profit margin excluding one-time costs confirmed profitability improvement at 4.1%.

Joo-Soo Hong, a researcher at NH Investment & Securities, explained, "While external growth is expected to continue in the second half, the full effect of restructuring and easing raw material burdens are expected to enable a recovery of operating profit margin to around 5%. In the long term, the completion of the second-generation IDB (Integrated Electronic Braking Device) development in 2025 is expected to ease R&D burdens."

He added, "New orders in the second quarter amounted to 4.2 trillion KRW, achieving 42.6% of the annual target. Considering the possibility of securing new platforms from Hyundai Motor Group in the second half, achieving the target is feasible."

HL Mando is analyzed to continue stable growth centered on major clients. The sales growth rate to North American EV makers in the second quarter is estimated at approximately 103% year-on-year, with the sales proportion expanding to about 16.3%.

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