[Click eStock] "Hyundai AutoEver Target Price 160,000 Won"

Hyundai Motor Securities on the 13th set the target price of Hyundai AutoEver at 160,000 KRW.

It is expected that the first quarter sales will record 648 billion KRW and operating profit 32.5 billion KRW, meeting market expectations. Sales are forecasted to significantly exceed guidance, which is analyzed to be due to steady navigation sales growth driven by a favorable finished car industry environment and solid operating performance in the SI division. Despite the off-season first quarter, an operating profit margin of 5% is expected as the proportion of vehicle SW sales increases.

For the exponential increase in demand for MobilGene, a high value-added solution within the vehicle SW business division, the commercialization of Level 3 autonomous driving is a prerequisite. The Level 3 autonomous driving solution (HDP) is scheduled to be first applied to the Kia EV9 GT Line, which is set to be released in the second half of the year. It is expected to be sequentially installed in high-end lineups including the G90. With the commercialization of Level 3, Hyundai AutoEver’s supply price per unit is expected to surge 4 to 5 times compared to the previous generation, leading to a meaningful expansion of MobilGene’s sales proportion from next year.

Hyundai AutoEver recently signed a platform development cooperation agreement with Avikus, a ship autonomous navigation solution company under HD Hyundai Group. This involves applying Hyundai AutoEver’s vehicle SW platform MobilGene to Avikus’s autonomous navigation solution NewBoat for leisure boats, aiming to mass-produce ship SW platforms starting in 2025. The leisure boat market is estimated at 2 million units annually (including modifications), with autonomous navigation solutions expected to be installed on 400,000 leisure boats by 2030.

Hyun-Yong Kim, a researcher at Hyundai Motor Securities, said, "The investment point is the application and commercialization of Level 3 autonomous driving in finished cars," adding, "It will take at least six months until application, and the expansion of applicable models and meaningful increase in MobilGene sales can be captured next year." He further stated, "Considering the current situation where an extremely conservative guidance is maintained due to the previous year's low base effect, aggressive new purchases at the current stock price with a P/E ratio of 27 are judged to be difficult."