KB Securities Report
On the 28th, KB Securities revised upward its operating profit forecasts for Hyundai Glovis by 7.8% for this year and 24.1% for next year, based on the outlook for the Completely Knocked Down (CKD) product sector. The investment rating was maintained at 'Buy' with a target price of 230,000 KRW.
Seongjin Kang, a researcher at KB Securities, stated, "Hyundai Glovis's operating profit for the first quarter of this year recorded 434.7 billion KRW, a 2% increase compared to the previous year, exceeding market consensus by 9.2% but falling short of KB Securities' previous forecast by 3.3%."
The downward revision in profit forecasts is largely attributed to the adjustment of the won-dollar exchange rate assumption from 1,390 KRW to 1,272 KRW. Operating profits from Hyundai Glovis's forwarding, shipping, and CKD businesses are negatively affected by the decline in exchange rates. Considerations also include the reduced sales proportion of non-affiliated automobile carrier ships (PCTC) and the deterioration of the bulk shipping market.
However, the annual operating profit for this year is expected to reach 1.6692 trillion KRW, a 7.2% decrease from the previous year, which surpasses the market consensus by 1.7% and KB Securities' previous forecast by 7.8%. Researcher Kang emphasized, "Logistics demand due to the normalization of production and sales in the Hyundai Motor Group, the potential increase in CKD sales due to rising automobile parts prices, and the recent rebound in exchange rates are key investment points."
Researcher Kang also noted, "Hyundai Glovis's stock price has declined since early 2021, reflecting the peak-out in the logistics industry, and further dropped as it was mentioned as a potential acquisition candidate for HMM (011200). However, considering that profit forecast adjustments related to the logistics downturn have been sufficiently made and that Hyundai Glovis's management has officially dismissed the possibility of acquiring HMM, the current stock price has fully reflected the negative factors."
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