"Hyundai Wia Shows Structural Improvement, Target Price Raised" [Click e-Stock]

On April 29, DB Financial Investment maintained its "Buy" investment opinion on Hyundai Wia and raised its target price to 100,000 won.

Nam Jooshin, an analyst at DB Financial Investment, stated, "The target price reflects the normalization of next year's earnings and the entry into a phase of improved profitability driven by the shift to a business structure centered on thermal management." He added, "Attention should be paid to the recovery in volume from Mexico, where hybrid vehicles (HEVs) will begin mass production in June this year, as well as the possibility of orders for thermal management systems for Hyundai Motor Group's eM/eS platforms. There is also expectation for mid- to long-term growth momentum in future businesses such as robotics."

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In particular, the company is expected to continue demonstrating structural improvements after the second quarter of this year. For auto parts, improvements are anticipated in Mexico with mass production of HEV engines, the stabilization of production in Korea and China, and a gradual reduction of the impact from decreased volumes in Russia. As for modules, sales expansion is expected thanks to the launch of new models such as the Kia EV3 and EV4. For drivetrains and constant velocity joints, the company anticipates benefits from strong sales of sport utility vehicles (SUVs) and expansion beyond group affiliates. In thermal management, revenue growth is expected to accelerate with the expansion of application models such as PV5 and EV2. In the defense sector, the company expects stable sales to continue, reflecting export volumes of the K2 and K9.

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