[Click eStock] "HL Mando, Valuation at Historic Low... Bottom Buying Strategy"

PER 4.8x, PBR 0.7x Level
Q1 Operating Profit 75.6 Billion Won, Exceeding Consensus
"Profitability to Fully Recover from Second Half"

Ebest Investment & Securities analyzed on the 29th that HL Mando's valuation is at a historical low. They maintained a 'Buy' investment rating and a target price of 45,000 KRW. HL Mando's closing price on the previous trading day was 32,600 KRW.

Researcher Lee Byung-geun of Ebest Investment & Securities stated, "The current stock price is at a valuation of a 2024 earnings-based price-to-earnings ratio (PER) of 4.8 times and a price-to-book ratio (PBR) of 0.7 times, which is a historical low valuation. The decline in stock price caused by the slowdown in electric vehicle demand and the delay in the launch of autonomous vehicles by Hyundai Motor Group has already been reflected in the stock price. We expect profitability to recover significantly in the second half, making a bottom-fishing strategy valid."

HL Mando posted first-quarter sales of 2.1 trillion KRW and operating profit of 75.6 billion KRW, slightly exceeding the market consensus (average forecast) operating profit of 73.4 billion KRW. By region, China and others (India + Europe) and North America increased by 7.2%, 15.7%, and 9.0% respectively compared to 2022. Korea decreased by 2.4% due to a reduction in Hyundai Motor Group's volume. First-quarter new orders amounted to 6.2 trillion KRW, which is 41% of this year's target order volume. Additionally, the strategic investment by CleMove in a Chinese autonomous driving company led to a rise in its stock price from the first quarter of this year, resulting in a financial asset valuation gain of 148.2 billion KRW being reflected as non-operating income.

Due to the slowdown in the electric vehicle market demand, sales expansion to HL Mando's largest customer, the leading North American electric vehicle company, is limited. The researcher said, "However, in the second half, volume for HMGMA and Mexico IDB is expected to increase, and as the major electric vehicle companies advance the timing of low-cost electric vehicle distribution, HL Mando is also expected to benefit. Furthermore, if the entry of major electric vehicle companies into India is confirmed, HL Mando, which has already secured production capacity, is highly likely to receive orders." When the Telegaon plant, acquired by Hyundai Motor Group from GM, begins operation next year, the volume for Hyundai Motor Group is also expected to increase.

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