[Click eStock] Hyundai Motor Company, Quarter's Highest Sales Tarnished

[Asia Economy Reporter Junho Hwang] Meritz Securities announced on the 26th that although Hyundai Motor recorded its highest quarterly sales in the fourth quarter of last year, it is lowering its target stock price to 250,000 KRW due to rising logistics costs and raw material prices.

Hyundai Motor recorded sales of 31 trillion KRW in the fourth quarter of last year. Despite a sales decline (-16%) caused by semiconductor shortages, favorable exchange rates, reduced incentives, and an increase in the sales proportion of SUVs/Luxury vehicles led to the highest sales ever recorded.

Operating profit was 1.53 trillion KRW. It increased by 22% compared to the previous year but was 15% lower than market expectations. Excluding the 386.6 billion KRW recall cost for Kona EV incurred in the same period last year, operating profit decreased by 7%. Despite rising vehicle ASP and strong financial performance, the burden of increasing logistics costs and raw material prices is gradually expanding.

Pre-tax profit was 1.47 trillion KRW, about 29% below market expectations. The large-scale goodwill impairment of overseas subsidiaries accumulating losses was a stumbling block. If losses continue to accumulate, some additional goodwill amortization may occur this year as well.

Researcher Junseong Kim of Meritz Securities said, "Hyundai Motor's silence is getting longer," and evaluated that "since the acquisition of Boston Dynamics at the end of 2020, there has been no large-scale investment for mobility technology advancement, cooperation with external companies, or comprehensive blueprint presentation."

He added, "It is urgent to build value chains for vehicle production as a data device," and explained, "Ultimately, the concretization of the future is more important than the COVID-19 base effect and new car effect, which are approaching their peak out."