[Click eStock] Hyundai AutoEver Secures Mid- to Long-Term Growth Drivers

On July 29, LS Securities analyzed that Hyundai AutoEver has secured mid- to long-term growth drivers.

Lee Byungkeun, a researcher at LS Securities, stated, "Growth in the enterprise segment continues due to high value-added projects such as the establishment of next-generation ERP for finished vehicles in North America and cloud supply to group affiliates." He explained, "In the second quarter, the enterprise segment recorded sales of 811.7 billion KRW, a 15.4% increase compared to the same period last year."

He added, "The ITO unit price negotiations conducted in the second quarter will be reflected in the second half of the year."

Lee emphasized, "The GPM for the vehicle software segment reached 19%," and added, "Profitability improved compared to the previous quarter as deferred revenue and development costs, which should have been recognized in the first quarter of this year, were recognized in the second quarter."

He analyzed, "Starting from the second quarter of this year, the revenue recognition structure has changed from the previous method, where the head office directly supplied navigation systems for domestic and overseas markets, to a method where overseas subsidiaries supply navigation systems for locally produced vehicles." He further stated, "The foreign exchange risk that existed in the previous structure, where revenue was in KRW but costs were in USD or EUR, has been somewhat offset." He predicted, "Due to uncertainties in the downstream market, the growth potential for navigation systems is likely to slow, but in the mid- to long-term, the proportion of automotive software is expected to gradually increase through SDV growth."

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