[Click eStock] "Hallaholdings, Expected Synergy Effects and External Expansion Achievements This Year"

IBK Investment & Securities Report

[Asia Economy Reporter Gong Byung-sun] IBK Investment & Securities raised the target price for Halla Holdings from 50,000 KRW to 60,000 KRW on the 25th, expecting business synergy and external expansion results. The investment opinion was maintained as 'Buy.'

With Mando acquiring Mando Hella Electronics (MHE), greater business synergy for Halla Holdings is anticipated. MHE was established in 2008 as a company with 50% equity investment each from Germany's HELLA and Halla Holdings. On the 3rd, Mando acquired 100% of MHE's shares, with the sale price amounting to 165 billion KRW.

Kim Jang-won, an analyst at IBK Investment & Securities, explained, "The MHE sale price might be somewhat disappointing from the holding company's perspective, but for Mando, which had to purchase not only Halla Holdings' stake but also HELLA's shares, it was a compromise price condition," adding, "Since Mando's value is ultimately linked to the holding company's value, it was a magnanimous decision considering synergy."

Halla Holdings is expected to focus on expanding its own business scope and profit-centered operations in the future. Mando will be fully responsible for the advancement of automotive technology, while Halla Holdings will concentrate solely on its own business. The main business of Halla Holdings is the holding business, which controls business content through ownership of subsidiary shares.

This year, Halla Holdings is expected to achieve nearly 30% sales growth through diversification of its business portfolio and stabilization of overseas operations in its own business. Analyst Kim said, "Profitability will improve with an increased proportion of new parts-centered businesses rather than existing logistics businesses," and added, "The housing business is also expected to perform well."

Furthermore, Analyst Kim stated, "The holding company with its own business has secured over 200 billion KRW in cash and is considering additional business items," and said, "Based on favorable earnings forecasts including its own business, a high level of shareholder returns is expected to be maintained."