A Brief Pause: ‘Hyundai Glovis’

Positive Outlook on New Hydrogen and Electric Vehicle Battery Businesses... Caution Advised in Progress

[Asia Economy Reporter Eunmo Koo] As the Chung Eui-sun era at Hyundai Glovis has fully commenced, the company is gradually unveiling its future strategies, including the electric vehicle battery rental business, leading to an upward trend in its stock price. However, there are also cautious views suggesting the need to monitor the progress of new businesses before making approaches.

According to the Korea Exchange on the 27th, Hyundai Glovis's stock price closed at 178,500 KRW, down 5.31% (10,000 KRW) from the previous trading day. The stock price had recently surged significantly during the formalization of Hyundai Motor Group Chairman Chung Eui-sun's leadership, reaching an intraday record high of 222,000 KRW on the 20th.

Subsequently, institutional investors net sold more than 50 billion KRW, causing the price to retreat to the 170,000 KRW level. The rapid stock price increase driven by expectations of benefits from the corporate governance restructuring exhausted short-term upward momentum. Since August, Hyundai Glovis's stock price has risen 60.1% until the previous day, overwhelmingly outperforming the KOSPI return of 4.2% during the same period.

Although the stock price is taking a brief breather, the overall outlook on new businesses remains positive. Hyundai Glovis recently announced in its earnings conference call that it is preparing new businesses related to hydrogen and electric vehicle batteries. In the hydrogen sector, it plans maritime transportation using hydrogen carriers and land distribution business using special tube trailers. Regarding electric vehicles, it is pursuing battery charging infrastructure construction, electric vehicle battery rental business, and used battery recycling business.

Choi Go-woon, a researcher at Korea Investment & Securities, said, "Until now, Glovis's plans for expanding new businesses have been less prominent compared to other affiliates, but with Chairman Chung's leadership fully underway, momentum is building starting with various memorandums of understanding (MOUs)." He added, "Among various possibilities such as hydrogen logistics and used car trading, the electric vehicle battery utilization business will be an important opportunity for revaluation." Hyundai Glovis has signed MOUs with Korea Gas Corporation and others to build a hydrogen distribution platform, and with LG Chem and Hyundai Motor Company for the electric vehicle battery rental business, actively entering various businesses regarded as new growth engines.

However, there are also points raised that it is necessary to watch cautiously until the new businesses become concrete. Eom Kyung-ah, a researcher at Shin Young Securities, noted, "Since both hydrogen producers and consumers exist within the group, there is no risk of lack of sales channels in transportation and distribution businesses," but added, "As they plan to enter the battery leasing business, initial facility investment demand is expected to be high, so there is a high possibility of an investment watch period due to expanded facility investments in the future."