[Click eStock] "Hyundai Glovis to Exceed Market Expectations in Q2"

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating and a target price of 300,000 KRW for Hyundai Glovis on the 20th.

The company's expected sales for the second quarter are forecasted at 6.5337 trillion KRW and operating profit at 427.2 billion KRW, surpassing market expectations (sales 6.28 trillion KRW, operating profit 393.8 billion KRW).

Ji-hwan Yang, a researcher at Daishin Securities, said, "Although concerns about a global economic recession exist, the waiting demand for new cars will be a solid support," adding, "The impact on performance from the Russia-Ukraine situation, Shanghai lockdown, and Cargo Solidarity strike in the second quarter is expected to be limited."

In the second quarter, the continued weak won trend is expected to have a positive effect on the scale and profitability of the shipping sector, including finished vehicle transportation, and the CKD business segment. Although logistics semi-assembled products (CKD) are affected by the suspension of operations at the Russian plant, the operation of the Indonesian plant and the recovery of operating rates at overseas plants excluding Russia are expected to offset this impact.

Regarding the China lockdown, there is no direct impact on the CKD segment. Researcher Yang explained, "There may be some impact on finished vehicle maritime transport, but demand for finished vehicle and heavy equipment carriers (PCTC) is strong, so there is no noticeable effect."

The automobile carrier (PCC) business segment is expected to continue improving profitability through the expansion of heavy and large heavy cargo transported via automobile carriers. The PCC market is expected to maintain high charter rates and freight charges as limited new ship deliveries are anticipated to continue until 2023.

Researcher Ji-hwan Yang said, "It is believed that the new ship orders for expanding the PCC fleet this year are being reconsidered," and added, "In the new business segment, investment reviews are underway to expand the overseas used car business."