[Click eStock] "Hyundai Mobis, Lack of Short-Term Stock Rebound Momentum... Target Price Down"

Shinhan Investment Corp. on the 29th downgraded the target price for Hyundai Mobis from 300,000 KRW to 250,000 KRW, citing a lack of short-term stock price rebound momentum. The investment rating was maintained at 'Buy.'

Jung Yong-jin, a research fellow at Shinhan Investment Corp., explained, "Considering the conservative volume growth plan for finished vehicles in 2024, we excluded the previously applied premium factor," adding, "Due to the conservative volume policy of finished vehicles, there is no short-term stock price rebound momentum."

Hyundai Mobis reported Q4 results last year with sales of 14.7 trillion KRW, down 2% year-on-year, and operating profit of 523.2 billion KRW, down 21%. Research fellow Jung analyzed, "This is a disappointing performance, falling 22% short of market expectations (operating profit of 672.5 billion KRW)," and estimated that "approximately 190 billion KRW in costs were reflected due to numerous one-time expenses, including retroactive labor cost increases and provisions." He added, "Although the chronic occurrence of provisions has cast a shadow, the fundamental profitability structure is improving."

This year, Hyundai Mobis is expected to focus on profit improvement centered on internal stability while external growth remains stagnant. Research fellow Jung said, "With the stagnation of finished vehicle volume growth and weakening demand in the electric vehicle market, there is significant uncertainty in the parts business," and added, "Based on ongoing cost reduction efforts and an increase in the sales proportion excluding affiliates with guaranteed profitability, gradual performance improvement is possible." Shinhan Investment Corp. forecasts Hyundai Mobis's performance this year with sales increasing 1% year-on-year to 59.8 trillion KRW and operating profit rising 31% to 3 trillion KRW.