[Click e-Stock] "Hyundai AutoEver: Disappointing Quarterly Volatility... Target Price Lowered"

On April 29, Daishin Securities lowered its target price for Hyundai AutoEver from 210,000 won to 200,000 won, citing disappointment over quarterly earnings volatility but maintaining that the company’s momentum and overall direction remain intact. The investment rating was kept at 'Buy'.

Kim Guyoun, a researcher at Daishin Securities, explained, "The downward revision of the target price reflects a slight adjustment to earnings, taking into account the conservative investment stance of client companies due to concerns over U.S. tariffs in 2025."

In the first quarter of this year, Hyundai AutoEver reported revenue of 833.3 billion won, up 14% year-on-year, and operating profit of 26.7 billion won, down 13%. Kim noted, "First-quarter operating profit was a significant earnings shock, falling well short of the consensus (the average forecast by securities firms) of 42 billion won and our own estimate of 46.2 billion won." He analyzed, "This was due to increased cost recognition resulting from delayed revenue recognition for vehicle software (SW), as well as margin contraction." He added, "Excluding these factors, we estimate actual operating profit at 42 billion won, which is in line with consensus."

Daishin Securities forecasts Hyundai AutoEver’s full-year revenue to increase by 12% year-on-year to 4.1 trillion won, with operating profit rising 7% to 239 billion won. Kim stated, "We expect solid results this year, driven by normalization of enterprise IT budget execution and continued high growth in automotive software."

The view remains that momentum and direction are still valid. Kim commented, "Although first-quarter results were weak due to delays in vehicle software sales, the investment case for Hyundai AutoEver remains largely intact." He explained, "The company stands to benefit from group-wide investments in smart factories, robotics, and software-defined vehicles (SDV); has potential for mobility business expansion; and possesses attractive investment capacity thanks to a stable financial structure." He added, "Given that the actual impact of tariffs within the parts sector is limited and that earnings visibility is expected to improve from the second quarter onward, the company’s long-term value trajectory should remain upward."

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