[Featured Stock] Dong-A Hwasung, Hyundai Motor's Eco-Friendly Mobility Transformation... Exclusive E-GMP and Hydrogen Vehicle Parts

[Asia Economy Reporter Park Hyung-su] It appears that the news of Hyundai Motor Group deciding not to develop new diesel engines has impacted stock prices. Attention is focused on Dong-A Hwasung, which supplies related parts, as the group embarks on a major shift toward eco-friendly mobility such as hydrogen fuel cell vehicles and pure electric vehicles.

At 9:52 a.m. on the 13th, Dong-A Hwasung was trading at 13,700 KRW, up 11.38% from the previous day.

On the same day, a media outlet reported that Hyundai Motor Group completely halted new diesel engine development at the end of last year. The group plans to only add some improved versions of engines developed for Hyundai, Kia, and Genesis diesel engines.

The complete vehicle lineup is being reorganized into eco-friendly cars. The industry expects that internal combustion engine vehicles will be removed from the lineup and replaced with eco-friendly vehicles starting with the launch of full-change (full model change) models. From this year, Hyundai’s Ioniq and Kia’s CV (project name), which apply the electric vehicle-exclusive platform E-GMP, will be produced in earnest.

Dong-A Hwasung is a specialized manufacturer of automotive, home appliance, and industrial special rubber parts. Its main products include automotive gaskets and hoses, as well as gaskets that absorb vibration and provide cushioning functions for drum washing machines. The company has been steadily expanding from internal combustion engine parts to parts for electric and hydrogen vehicles. For electric vehicles, it supplies battery pack gaskets and seals, cooling hoses, and PTC heater gaskets to two battery companies. According to SK Securities, the electric vehicle gasket was recently selected for Hyundai’s electric vehicle-exclusive platform ‘E-GMP.’ It is known to have secured exclusive orders for the required volume until 2022.

Seochung-woo, a researcher at SK Securities, said, "The company is diversifying its items in line with the era’s shift from internal combustion engine vehicles to eco-friendly vehicle parts," adding, "With the recent rapid growth of the electric vehicle market, benefits are expected from customers’ investments and capacity expansions."

He evaluated, "It is understood that Dong-A Hwasung’s electric vehicle gasket was recently selected for Hyundai’s electric vehicle-exclusive platform ‘E-GMP,’ securing exclusive orders for the required volume until 2022," and added, "Direct benefits are also expected from the almost certain expansion of GM’s investments."

Dong-A Hwasung also produces intake and bath hoses connected to stacks for hydrogen vehicles and supplies them to Hyundai Motor through Hyundai Mobis.