[Click eStock] "Hyundai AutoEver Ensures Long-Term Growth... Target Price Set at 200,000 Won"

On the 17th, SK Securities initiated coverage on Hyundai AutoEver, describing it as a "core company related to autonomous driving with guaranteed long-term growth potential," and issued a buy rating with a target price of 200,000 KRW.

On the same day, Yoon Hyuk-jin, a researcher at SK Securities, stated, "The Hyundai Motor Group is broadly implementing next-generation Enterprise Resource Planning (ERP), starting with Hyundai Kia Motors and expanding to overseas subsidiaries, factories, and all affiliates," adding, "Additionally, smart factory system integration (SI) sales targeting Hyundai Motor Group are increasing from 10 to 20 billion KRW per factory to 50 to 80 billion KRW per smart factory."

Researcher Yoon said, "Most of the sales from building the Hyundai Kia Motors Georgia plant will occur in 2024 and 2025," adding, "Significant SI sales are expected from the electrification transitions at the Ulsan and Gwangmyeong plants, as well as Hyundai Motor's Indonesia and India plants." Next year's SI sales are projected to reach 1.1 trillion KRW, an 11% increase from this year, which is expected to lead to growth in IT outsourcing (ITO) sales.

Hyundai AutoEver supplies navigation software (SW) to Hyundai Kia Motors. The installation rate for overseas sold vehicles is still around 50%, but it continues to rise due to regulations such as the European Union (EU)'s Intelligent Speed Assistance (ISA), resulting in navigation SW sales growth that exceeds the production volume of finished vehicles. Furthermore, with the premiumization of automobiles and augmented reality navigation, the average selling price (ASP) has increased, leading to growth in both price and sales volume.

As the autonomous driving level of finished vehicles increases, Hyundai AutoEver's vehicle software platform, MobilGene, also experiences corresponding sales growth. Researcher Yoon stated, "Next year's performance will increase due to digital transformation within the group and smart factory sales, and in 2025, high sales growth will be maintained with the full-scale entry into vehicle software," adding, "Although the current valuation (stock price relative to corporate value) may seem high, time and industry trends are favorable to Hyundai AutoEver."