[Click e-Stock] Why Hyundai Autoever Deserves Attention Despite Valuation Pressures

On May 21, Daishin Securities raised its target price for Hyundai Autoever from 5.6 million won to 7.2 million won, citing clear benefits from Hyundai Motor Group's investments in physical artificial intelligence (AI), despite valuation pressures. The investment rating was maintained as 'Buy'.

Daishin Securities analyst Kim Guyon stated, "There are valuation burdens relative to short-term earnings, but expectations for benefits from data center investments within Hyundai Motor Group, expansion of the robot control business, and an increased role in software-defined vehicles (SDVs) remain valid." The analyst added, "Furthermore, with only 25% of shares in free float, Euisun Chung, Executive Chair of Hyundai Motor Group, holding a 7% stake, and significant cash (investment) capacity, these factors will support the stock price."

Hyundai Autoever is expected to be responsible for the system integration (SI) area of Boston Dynamics (BD) robots. The company is anticipated to handle system construction for robot deployment at worksites and robot control (including digital twin, OTA, etc.) within industrial sites. Analyst Kim commented, "Fundamentally, Hyundai Autoever's SI revenue is linked to the group's capital expenditure (Capex), making the visibility of benefits from Hyundai Motor Group's physical AI investments clear." He further explained, "For example, in the AI factory investment project alone, Hyundai Motor Group is expected to invest a total of 6 trillion won, including 3.3 trillion won for the purchase of NVIDIA GPU chips. Of the estimated IT Capex investment of 4.2 trillion won, SI-related costs are projected to be 170 billion won, which is about 5% of Hyundai Autoever's projected enterprise IT revenue of 3.4 trillion won in 2025."

Additionally, by deploying robots onsite, Hyundai Autoever is expected to convert portions of Hyundai Motor Group's previous labor expense into revenue and profit. Analyst Kim stated, "Assuming robots replace 1% of the production workforce at Hyundai Motor Group's three main companies and that 40% of the existing labor cost is paid, Hyundai Autoever's potential robot revenue could exceed 450 billion won." He continued, "In 2025, the labor costs of Hyundai Motor Group's listed affiliates are expected to total 32.7 trillion won, so even if only 1% is recognized as SI revenue annually, it would amount to 320 billion won per year."

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