[Click eStock] "Hyundai Motor Hits Record-High U.S. Market Share... Target Price Maintained"

On November 24, SK Securities maintained its "Buy" investment opinion and target price of 3.3 million won for Hyundai Motor Company, stating that the company is expected to post solid results despite tariff costs.

On this day, Yoon Hyukjin, a researcher at SK Securities, commented that Hyundai Motor Company is likely to continue increasing its market share in the United States, particularly with its hybrid vehicles.

For next year's performance, he forecasted consolidated sales of 201.7 trillion won (a 6.0% increase from this year), operating profit of 13.4 trillion won (a 9.6% increase), and an operating margin of 6.7%. Researcher Yoon explained, "The new standard for the won-dollar exchange rate will offset nearly half of the tariff costs," and added, "The rise in market share in the United States, which will be reshaped by the 15% tariff era, is a positive factor for next year's and 2027's results."

In the U.S. automotive market, the share of hybrid vehicles among all cars, which was only about 6% at the beginning of 2022, has more than doubled to over 13% recently. In addition to the growth of the hybrid market, Hyundai Motor Company's market share for hybrid vehicles in the United States has risen from the 5% range at the beginning of last year to the 8-9% range recently.

Researcher Yoon analyzed, "Driven by strong sales of the Tucson Hybrid, along with the Santa Fe, Sonata, and Avante hybrids, Hyundai Motor Company is achieving both revenue and profitability growth." He further explained, "The increasing share of hybrids, which are priced more than 10% higher than existing internal combustion engine models, the launch of the relatively high-priced Palisade Hybrid, and the rising sales ratio of the Genesis brand, which is priced 60-70% higher than the Hyundai brand, are all factors contributing to a long-term increase in Hyundai Motor Company's average selling price (ASP)."

He added, "Even under a 25% tariff, Hyundai Motor Company's market share in the United States has increased. If companies with weaker profitability such as Nissan and Stellantis raise their prices first, the U.S. automotive market, where a 15% import tariff is imposed, is likely to undergo rapid restructuring centered around Hyundai Motor Group and Toyota." He continued, "With the industry entering a boom period for new models (such as the launch of the new Palisade Hybrid in the fourth quarter of this year and the full model changes for the Tucson and Avante next year), growth potential will further increase."

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