Hyundai Motors Speeding Ahead, Another 'Flower Road' in the Second Half

[Asia Economy Reporter Eunmo Koo] Hyundai Motor is accelerating its stock price increase as sales perform well in domestic and international markets.

According to the Korea Exchange on the 7th, Hyundai Motor's stock price closed at 144,500 KRW, up 7.84% (10,500 KRW) from the previous trading day. Kia Motors also recorded 42,150 KRW, up 2.55% (1,050 KRW). Hyundai Motor, which at one point during the session rose to 146,000 KRW, setting a 52-week high, continued its upward trend for four consecutive trading days, raising its closing price to the highest level in about 2 years and 3 months since May 21, 2018 (149,000 KRW). Hyundai Motor continued its rise on the day, reaching 148,000 KRW as of 9:40 AM.

As the stock price rose, market capitalization also recovered to the 30 trillion KRW level. Based on the previous day's closing price, Hyundai Motor's market capitalization reached 30.875 trillion KRW, returning to the 30 trillion KRW range for the first time this year. Compared to the beginning of the year (25.2128 trillion KRW), this is an increase of more than 5 trillion KRW.

The recent rally in Hyundai Motor's stock price is interpreted as having alleviated concerns about a sales cliff due to the release of favorable July domestic market sales figures. In July, excluding imported cars, domestic finished car sales reached 144,000 units, a 10.2% increase compared to the same period last year. In particular, Hyundai Motor led domestic car sales with improved sales of high-profit models such as the Genesis G80 and GV80, Palisade, and Grandeur. Yongjin Jung, a researcher at Shinhan Financial Investment, explained, "The individual consumption tax benefits were changed favorably for high-priced car sales," adding, "It was an advantageous environment for Hyundai Motor, which focused on a high-priced new car lineup."

Having succeeded in defending the domestic market, the overseas market is also showing signs of demand recovery centered on advanced countries such as the United States and Europe, suggesting that the improvement trend will accelerate in the future. Earlier, Hyundai Motor announced that its sales volume in the U.S. market in July reached 57,677 units, a 1% increase compared to the same month last year. Kia Motors also announced that its retail sales performance in July recorded the highest ever for any July.

Ja-il Lee, a researcher at Eugene Investment & Securities, said, "Despite concerns about the resurgence of COVID-19, sales are showing a recovery trend," and added, "Overseas sales are still a major variable due to COVID-19, but if the spread stops, pent-up demand may be realized." Dongha Kim, a researcher at Hanwha Investment & Securities, also predicted, "As major countries such as the U.S. and Europe resume economic activities, considering the increase in overseas factory operating rates, gradual recovery is expected to continue in the second half of the year."