[Click eStock] "Hyundai Corporation, 1Q Earnings Surprise Expected"

Daishin Securities maintained a buy rating and a target price of 25,000 KRW for Hyundai Corporation on the 25th, expecting a stronger-than-anticipated earnings rebound in the first quarter of this year.

Hyundai Corporation's consolidated first-quarter sales are projected to increase by 33.4% year-on-year to 1.7052 trillion KRW, with operating profit expected to rise 62.6% to 23.6 billion KRW.

Researcher Lee Taehwan of Daishin Securities explained, "The steel division's performance is estimated to have recorded excellent profitability due to global steel price increases driven by China's reopening expectations, production cuts by European steelmakers, and steel supply-demand issues caused by the Turkey earthquake," adding, "We expect operating profit in the steel division to increase by about twice compared to the previous quarter."

He continued, "The passenger car parts division also appears to have fully benefited from increased demand in Latin America, the Middle East, and CIS regions following the resolution of semiconductor supply issues, with sales rising to over 500 billion KRW," noting, "Sales of passenger car parts in the same period last year were only 143.7 billion KRW, but the division has sustained steep sales growth for four consecutive quarters." The researcher also stated, "Additionally, despite lower average oil prices, the petrochemical division is believed to have maintained a steady profit flow," and added, "Considering that resource dividend income tends to be concentrated in the first half of the year from Qatar LNG dividends, it is estimated to have increased compared to the previous quarter."

Furthermore, it is analyzed that European steel prices are expected to remain at levels higher than the first-quarter average, and international oil prices are forecasted to rise following production cut announcements, suggesting that Hyundai Corporation's profit momentum will continue into the second quarter.