[Click eStock] "Hydrogen Car Sales Slowdown, Iljin Hysolus Target Price↓"

Hydrogen Storage Tank Sales Decline
Next Year, 'Commercial Vehicle Increase' Benefits Begin

On the 24th, SK Securities lowered the target price for Iljin Hysolus to 38,600 KRW, reflecting the sluggish sales of passenger hydrogen fuel cell vehicles (hydrogen cars). The investment rating was maintained as a buy.

On the same day, Na Seung-doo, a researcher at SK Securities, stated, "As of last month this year, the cumulative domestic sales of hydrogen cars were about 4,000 units. Compared to last year, when more than 10,000 hydrogen cars were sold, the annual cumulative sales this year are expected to be less than half that amount," adding, "Sales of hydrogen storage containers (by Iljin Hysolus) used in hydrogen cars are inevitably decreasing." The reasons why hydrogen cars have not attracted consumer attention include 'insufficient hydrogen refueling infrastructure,' 'limited model options without consumer choice,' and 'still high prices.'

However, the annual performance slump is likely to be a one-time occurrence this year. Researcher Na explained, "According to next year's government budget, at least 11,000 hydrogen cars, including passenger and commercial vehicles, will be supplied, and more than 60 new hydrogen refueling stations will be established." He added, "Iljin Hysolus's client, the only domestic hydrogen car manufacturer (Hyundai Motor Company), is also planning to expand the supply of commercial vehicles and launch new passenger models."

He further analyzed, "By the third quarter of this year, cumulative sales related to commercial hydrogen storage containers reached 24.9 billion KRW, already significantly surpassing last year's annual sales of 16.4 billion KRW. Given the characteristics of hydrogen cars, which have a stronger presence in the commercial market, demand for hydrogen storage containers installed in commercial vehicles is expected to increase more steeply."

Researcher Na cautiously noted, "There is a possibility that the sales ratio of passenger and commercial hydrogen storage containers could reverse around 2025. The fact that Iljin Hysolus possesses the only domestically mass-produced and commercialized Type 4 hydrogen storage container technology will serve as a strong entry barrier for the time being." Type 4 containers are made by wrapping carbon fiber around high-density plastic instead of metal, which corrodes due to hydrogen. They have more than 10 times the strength of Type 1 to 3 containers, which have metal inner vessels, while weighing only one-third as much.

He added, "It is fortunate that subsidies related to hydrogen cars are not expected to decrease significantly. Rather, as efforts to clarify the subsidy payment system are emerging, the scope of subsidy recipients may even expand," concluding, "Excessive concerns could become new investment opportunities."