[Click eStock] "Hyundai Corporation, Profitability Improvement Visible in Second Half"

Strong Performance in Steel Sector... Expectations for Expansion of New Businesses

[Asia Economy Reporter Minwoo Lee] Hyundai Corporation is expected to rebound in performance from the second half of the year, overcoming the sluggish first half, thanks to improved profitability in the steel sector.

On the 25th, Hi Investment & Securities forecast that Hyundai Corporation will record consolidated sales of 1.0105 trillion KRW and operating profit of 11.3 billion KRW in the third quarter of this year. This represents an increase of 45.8% and 27.0%, respectively, compared to the same period last year. The market consensus is also expected to be exceeded by 5.4% and 3.7%, respectively.

Researcher Sangheon Lee of Hi Investment & Securities said, "As the logistics crisis is being resolved, profitability improvement is expected due to the global favorable market conditions in the steel sector," adding, "Additionally, the petrochemical business is expected to improve profitability due to product price increases caused by rising oil prices in the automotive materials sector."

In terms of overall non-operating income and expenses this year, equity method gains are coming in from overseas resource development projects such as Oman LNG. Since oil prices have risen compared to last year, equity method gains are expected to increase year-on-year.

The expansion of new business areas is also a positive factor accelerating growth. At the regular shareholders' meeting last March, Hyundai Corporation added four items to its articles of incorporation business purposes: ▲manufacturing and sales of automobiles and automobile parts ▲manufacturing and sales of electric vehicle parts ▲manufacturing and sales of eco-friendly and composite materials ▲construction of hydrogen and other energy infrastructure and related businesses. Researcher Lee predicted, "As new businesses become visible in the future, the growth rate could accelerate."

Against this backdrop, Hi Investment & Securities maintained a 'Buy' investment rating on Hyundai Corporation. The target price was lowered by about 7.2% to 26,000 KRW. The closing price on the previous trading day was 19,100 KRW.