Announcement of Core Technology Self-Securing with Electric Vehicle Platform E-GMP
Potential for Growth in Electric Vehicle Market Despite Decline in Internal Combustion Engine Market
[Asia Economy Reporter Minwoo Lee] It is forecasted that Hyundai Mobis's sales in the electrification sector alone will exceed 6 trillion KRW this year. This is based on Hyundai Motor's dedicated electric vehicle platform, concentrating various capabilities to establish competitiveness.
On the 2nd, Mirae Asset Daewoo projected that Hyundai Mobis will achieve sales of 42.708 trillion KRW and an operating profit of 2.524 trillion KRW this year. These figures represent increases of 17.3% and 42.3%, respectively, compared to last year's estimates. In particular, electrification sales are expected to rise by 52.6% from last year's forecast to 6.317 trillion KRW. This is because the sales volume of electric vehicles by Hyundai Motor and Kia Motors, the largest customers, are expected to increase by 51% and 59%, respectively, compared to the previous year. As the trend of expanding electric vehicles continues, the proportion of electrification sales is expected to grow from 7% in 2019 to 20% this year and 35% by 2025.
Hyundai Motor Group's proprietary electric vehicle platform, E-GMP, is also a significant positive factor. It is analyzed that the company can improve its structure from mainly assembly to possessing core technologies. Kim Min-kyung, a researcher at Mirae Asset Daewoo, stated, "Amid the rising importance of EV powertrains across the industry, such as the recent joint venture announcement between LG Electronics and Magna, Hyundai Mobis has secured competitiveness in EV powertrains aligned with the development of E-GMP." She added, "The acquisition of Hyundai Autron's automotive semiconductor business division and investment in Boston Dynamics indicate that hardware manufacturing capabilities related to electrification and autonomous driving within the group are being concentrated."
Last year's fourth-quarter performance is expected to be similar to the previous year, with sales of 10.466 trillion KRW and operating profit of 645.8 billion KRW. Due to the recovery of domestic and overseas operating rates of Hyundai Motor and Kia Motors, module and parts sales are estimated to decrease by 2.8% and 4.8%, respectively, compared to the same period last year. Electrification sales are expected to grow by 40% year-on-year, and although the exchange rate is somewhat unfavorable, the increase in volume is expected to limit the decrease in the A/S sector to 1.3% during the same period.
Against this backdrop, Mirae Asset Daewoo maintained a 'Buy' investment opinion on Hyundai Mobis and raised the target stock price by 24% to 310,000 KRW. The closing price on the previous trading day was 255,000 KRW. Researcher Kim explained, "The biggest investment point is that despite the decline in the internal combustion engine market, Hyundai Mobis can maintain overall growth by securing higher competitiveness in the electric vehicle industry."
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