[Click eStock] "Hyundai Glovis Expected to Continue Cost Improvements... Target Price Raised"

Target Price Raised by 24% from Previous Level

On September 5, NH Investment & Securities announced that it expects continued cost improvements for Hyundai Glovis and raised its target price from 182,000 won to 225,000 won. The investment opinion remains 'Buy'.

Jung Yeonseung, a researcher at NH Investment & Securities, stated, "The three key investment points are: cost improvements in the shipping division due to a reduction in high-cost chartered vessels; the possibility of being included among stocks eligible for separate taxation on dividend income; and the increased value of its stake in Boston Dynamics as the robotics market expands." He added, "Considering these investment points, we have removed the discount rate and raised the target price by 24% compared to the previous level."

In the first half of this year, 38 global car carriers were delivered, and the annual vessel supply growth rate is expected to reach 13%. Jung commented, "Global finished vehicle shipping volume is expected to increase by only 1% year-on-year, but the increase in shipments from Asia is causing greater shipping inefficiency, so supply and demand remain favorable even as fleets expand." He continued, "Major finished vehicle shipping companies such as Hyundai Glovis, Wallenius, and Hoegh Autoliners have previously deployed high-cost chartered vessels rather than their own ships to handle increased volume. As new ships are delivered sequentially, these high-cost vessels will be returned, which is expected to slightly reduce fleet costs in the second half of the year." He also noted, "Hyundai Glovis, including its affiliates, has secured stable freight rates through multi-year contracts with major automotive companies, and with ongoing cost structure improvements, profit growth is expected to continue in the second half."

Third-quarter results are expected to be similar to the previous quarter. In the second quarter, Hyundai Glovis recorded sales of 7.516 trillion won, up 6.4% year-on-year, and operating profit of 538.9 billion won, up 22.7%. Jung said, "Although there may be some impact from lower container freight rates and a slight decrease in working days in the third quarter, favorable exchange rates and improved profitability in the shipping division are expected to result in performance similar to the second quarter."

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