[Click eStock] Hyundai Motor Group Vehicle Shipments Decline... Unfavorable Environment Develops

"Performance Growth Expected to Slow...
Limited Upside for Stock Prices"
Hyundai Mobis and Hyundai Glovis Have Greater Upside Potential

As Hyundai Motor Group's finished vehicle shipments decline, an unfavorable environment is unfolding across parts suppliers, according to analysis. Although the won-dollar exchange rate is favorable, it is difficult for operating profit forecasts to continue rising due to increased incentives from intensified competition and the disappearance of inventory replenishment demand.

On the 21st, KB Securities maintained a 'buy' investment rating for major Hyundai Motor Group affiliates, including Hyundai Motor, Kia, Hyundai Mobis, and Hyundai Glovis. Investment preference was ranked in the order of Hyundai Mobis, Hyundai Glovis, Kia, and Hyundai Motor. This is based on the judgment that the cost recovery trend of Hyundai Mobis, which began in earnest after the third quarter of last year, will proceed smoothly this year as well.

According to Hyundai Motor Group's performance in the fourth quarter of last year, sales volume increased favorably compared to the market, but finished vehicle shipments continued to decline. The increase in sales volume was attributed to the diversification of the sales lineup with hybrids and others, but active promotional activities such as increased incentives also played a role. It was also emphasized that wholesale sales converged with or decreased compared to retail sales. This is analyzed as a result of the retail inventory shortage problem, which began in 2021 due to semiconductor shortages, finally being resolved. Therefore, if automobile demand does not increase significantly, the wholesale sales growth rate is expected to slow down in the future.

KB Securities forecast operating profits for Hyundai Motor and Kia in 2025 at 15.4 trillion won and 13.6 trillion won, respectively. This represents an increase of 29.5% and 24.7% from previous estimates. This reflects the rise in the won-dollar and won-euro exchange rates compared to previous levels. Therefore, while operating profits are expected to rise, the impact on stock prices is judged to be limited. Kang Sung-jin, a researcher at KB Securities, said, "It is difficult for operating profit forecasts to continue rising due to increased incentives from intensified competition and decreased wholesale sales from the disappearance of inventory replenishment demand," adding, "Global automakers are failing to close the gap with emerging electric vehicle companies in software-centric transformation and autonomous driving development."

KB Securities had a more positive view of Hyundai Mobis and Hyundai Glovis. Researcher Kang explained, "Hyundai Mobis continues to recover costs, and Hyundai Glovis improved affiliate-related profits through the renewal of the automobile carrier (PCTC) contract at the end of last year, while also securing room for expanding sales to non-affiliates," adding, "Among finished vehicle manufacturers, Kia, which benefits from the improved value of Hyundai Mobis shares, is preferred over Hyundai Motor."

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