[Click eStock] "Hyundai Motor Q2 Strong Earnings Expected... Target Price Up"

Target Price Raised to 340,000 Won
Favorable Exchange Rate in Q2... Positive Trend Continues

DS Investment & Securities forecasted strong second-quarter earnings for Hyundai Motor Company on the 16th. Accordingly, they maintained a 'Buy' investment rating and raised the target stock price to 340,000 KRW.

Choi Tae-yong, a researcher at DS Investment & Securities, stated, "We expect second-quarter sales to increase by 7.5% year-on-year to 45.4 trillion KRW, and operating profit to rise by 2% to 4.3 trillion KRW, indicating strong performance."

Researcher Choi explained, "Vehicle sales volume (excluding China) showed a slight growth of 1.3%, remaining in line with last year's level. The weak sales in regions other than the US were offset by the US market (+13.4%), driving the strong earnings."

In particular, the second-quarter exchange rate closed at 1,371 KRW (+4.3%), maintaining a favorable environment. Researcher Choi analyzed, "Although North American incentives rose to a simple quarterly average of 3,130 KRW (+112%), they are showing signs of slowing down. The average selling price (ASP) increased by 11% year-on-year, which can offset this."

Researcher Choi also anticipated solid performance in the second half of the year. The expected sales for 2024 are estimated to increase by 6% year-on-year to 172.9 trillion KRW, and operating profit is projected to rise by 2.5% to 15.6 trillion KRW. However, it is expected to differ from the first half, which was a collaboration of volume (Q) and price (P). The prolonged high interest rates and the high base effect from the second half of last year make a decline in volume (Q) inevitable.

Researcher Choi diagnosed, "Nevertheless, it is too early to be concerned. Rather, we expect performance driven by price (P) due to the continued favorable exchange rate exceeding expectations, expansion of HEV mix, and easing of incentive burdens from the operation of the Georgia plant in the US."