"Expansion of Electric Vehicle Orders"... 'Dooal' Expected to Show Performance Growth This Year

[Asia Economy Reporter Hyunseok Yoo] Duol is expected to achieve performance growth this year. It is analyzed that orders for electric vehicle models will be a positive factor.

According to the financial investment industry on the 14th, Duol recorded sales of 465.8 billion KRW and an operating profit of 20.5 billion KRW last year.

Researcher Song Seonjae of Hana Financial Investment explained, "Sales in Korea increased as the supplied models such as Hyundai Palisade and Genesis GV80 showed strong sales," but added, "Overall scale stagnated as sales to customers in China were sluggish and market demand in Europe and the Americas was weak due to the impact of COVID-19, resulting in decreased sales."

Along with this, the operating profit margin decreased by 1.5 percentage points compared to the previous year. Hana Financial Investment analyzed that the decline in European sales led to a mix deterioration, causing the operating profit margin to fall.

However, sales and operating profit this year are expected to increase by 7% and 22% respectively from the previous year, reaching 497 billion KRW and 24.9 billion KRW. He emphasized, "Overseas sales are expected to increase by 5% due to the base effect from weak market demand last year, while Korean sales are expected to increase by 8% due to the addition of Ioniq 5 and Genesis JW (project name). The operating profit margin is also expected to rise by 0.6 percentage points to 5.0% due to the fixed cost leverage effect from scale growth."

In particular, the expansion of orders related to electric vehicles is expected to contribute to Duol's growth. Duol secured orders for natural and artificial seat covers and fabrics used in Hyundai's dedicated electric vehicle models, Ioniq 5 and JW. It is expected that supplying these two models alone could generate annual sales of around 20 billion KRW.

He said, "Since Ioniq 5 and JW will start production throughout the year, the related sales increase effect will occur over 2021 and 2022," adding, "Additionally, orders for models to be released in 2022 have been completed, and there is a high possibility of orders for future electric vehicle models, so related growth potential is expected to expand." He continued, "Based on order experience and price competitiveness for Ioniq models, orders for electric vehicle models from other automakers are also underway, so related news should be closely monitored."