[Click eStock] "Hyundai Glovis, Corporate Value Reassessment Through Carlyle"

[Asia Economy Reporter Ji Yeon-jin] Korea Investment & Securities announced on the 27th that it maintains a buy investment opinion and a target price of 260,000 KRW for Hyundai Glovis, stating that an objective revaluation strategy has become possible through the global private equity firm Carlyle.

Hyundai Glovis's stock price surged 6% the previous day and has risen 25% over the past three months. This is due to Hyundai Motor and Kia announcing favorable earnings, as well as news of Carlyle's investment team visiting Hyundai Motor Group, which highlighted expectations for Hyundai Glovis's growth potential and enhancement of corporate value.

원본보기 아이콘

Carlyle purchased a 10% stake in Hyundai Glovis from Honorary Chairman Chung Mong-koo and Chairman Chung Eui-sun through SPC (Project Guardian Holdings) last January. Following Wilhelmsen (Den Norske), Carlyle became the third largest shareholder.

Ko Un Choi, a researcher at Korea Investment & Securities, evaluated, "From Hyundai Motor Group's perspective, enhancing the value of Hyundai Glovis's shares is ultimately important for future governance restructuring," adding, "This is a sensitive issue for stakeholders, but through the external investor Carlyle, it has become possible to establish an objective revaluation strategy."

Starting with directly appointing one director at the shareholders' meeting last March, Carlyle is expected to lead the expansion of new businesses such as hydrogen logistics and robotics, as well as strengthening shareholder returns. The expansion of dividend policy is particularly noteworthy. Hyundai Glovis's existing dividend guidance was the most conservative within the group and ended in 2021, so it is expected to be newly raised this year.

Researcher Choi stated, "Since contracts are signed on an annual basis, the strength of spot freight rates is reflected in earnings with a time lag, and thanks to maintaining stable financial and service capabilities even in the pandemic environment, the shipper base has expanded, so unlike concerns about a peak-out, operating profit is expected to structurally increase," adding, "Above all, long-term growth is also attractive through new business expansion, and valuation can be enhanced through value chain differentiation such as electric vehicle battery leasing and hydrogen logistics."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.