Hyundai Mobis Target Stock Price 280,000 Won... Global Expansion of Complete Vehicle Production

[Asia Economy Reporter Park Soyeon] Daol Investment & Securities maintained a target price of 280,000 KRW and a buy rating for Hyundai Mobis.

According to FN Guide on the 23rd, Daol Investment & Securities released a report on Hyundai Mobis stating, "The third-quarter earnings this year are expected to meet market expectations."

They forecast Hyundai Mobis to record an operating profit of 539.3 billion KRW and sales of 12.7 trillion KRW in the third quarter. They analyzed that it is necessary to focus on the possibility of a long-term turnaround driven by the global production expansion of finished vehicles.

They predicted that the accelerated growth trend of the A/S business's scale might slow down starting from the third quarter. On the other hand, they analyzed that signals of profit margin recovery coexist as the burden of transportation costs begins to ease significantly.

From the fourth quarter, they saw the possibility of demand slowdown in the European market, including Russia. They mentioned that the announcement of investment in electrification plants in response to the U.S. Inflation Reduction Act (IRA) secured future growth momentum.

Additionally, they noted that starting from the first half of this year, the ratio of research and development (R&D) expenses to electrification sales in parts manufacturing began to fall below 8%, which is positive for earnings.

Yoo Jiwoong, a researcher at Daol Investment & Securities, said, "The second half of this year is generally a period when fixed cost burdens are easing," adding, "It clearly shows the possibility of earnings growth next year."