[Click eStock] "Doich Motors Expected to Achieve Record Operating Profit This Year"

[Asia Economy Reporter Hyunseok Yoo] Hana Financial Investment analyzed on the 12th that Deutsche Motors is expected to achieve its highest ordinary profit this year. The investment opinion 'Buy' and the target stock price of 12,600 KRW were maintained.

Deutsche Motors recorded sales of 340 billion KRW and operating profit of 12.7 billion KRW in the fourth quarter of last year. Sales increased by 46.5% compared to the same period last year, but operating profit decreased by 17.8% to 12.7 billion KRW. Lee Jung-ki, a researcher at Hana Financial Investment, said, "Fourth-quarter sales increased due to the recovery of sales of BMW's main models," adding, "In 2020, five full-change models and four new models of BMW are scheduled to be released, so steady sales growth in new car sales is expected every quarter this year."

Hana Financial Investment forecasted that Deutsche Motors' sales this year will increase by 10.8% to 1.3423 trillion KRW compared to the previous year, while operating profit is expected to decrease by 18.4% to 678.9 billion KRW. He said, "Operating profit is expected to decline due to a base effect as the recognition of sales profit in the first quarter of this year is completed."

He continued, "Market share (M/S) expansion is expected due to an increase in BMW allocation volume in 2020, and sales growth of high-margin business divisions is expected from the start of Auto World operations from the second quarter," adding, "With the additional operation of Deutsche Auto showrooms and the addition of new brands, the highest annual ordinary profit is expected this year." He added, "Ordinary profit this year is expected to increase by 63.8% compared to the previous year to 52.8 billion KRW."