[Click eStock] Hyundai GTF Holdings, Attractive for Holding Company Value + Shareholder Returns

On the 30th, IBK Investment & Securities analyzed that once the major shareholder's in-kind contribution of Hyundai GEF Holdings is completed, it is expected to establish itself as a holding company both practically and structurally, making it quite attractive. No investment opinion or target price was provided.

Nam Seong-hyun, a researcher at IBK Investment & Securities, stated, "With the inclusion of Hyundai Department Store, additional dividend income sources are expected to be secured, and considering the expansion of practical control within the group, the current stock price level is judged to remain in an undervalued range." He added, "Furthermore, through the announcement of a stable dividend policy, there is a high likelihood of a strong focus on enhancing shareholder value, and since the group's business structure is based on domestic demand with rapid overseas business expansion, it is quite attractive."

According to holding company requirements, Hyundai GEF Holdings must hold more than 30% of shares in listed subsidiaries and more than 50% in unlisted subsidiaries. It is understood that the net asset value of Hyundai Department Store Group exceeds approximately 20 trillion KRW. If the current stock price level is maintained, the market capitalization of Hyundai GEF Holdings at the time the in-kind contribution is completed will be only about 500 billion KRW. Although it is common for holding companies to trade at a discount relative to asset value, considering the scale of Hyundai Department Store Group companies, this can be interpreted as an excessively undervalued range. The expansion of overseas business among major divisions is also positive. Overseas businesses include Zinus, Daewon Kangup, Hyundai L&C, Hyundai Green Food, and Hyundai H&S. Additionally, the shareholder return policy is a noteworthy aspect.

Researcher Nam said, "Hyundai GEF Holdings announced that it will cancel about 10% of its treasury shares at the time of the spin-off from Hyundai Green Food and disclosed that it will pay at least 15 billion KRW in dividends." He added, "After the holding company system is finalized, it is highly likely that precise guidelines for the shareholder return policy will be presented, and this figure is expected to increase following the inclusion of Hyundai Department Store."

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