Hyundai Motor and Kia experienced a sharp decline on the 5th. However, analysis suggests that their fundamentals remain stable, supported by increasing electric vehicle sales in the United States.
On that day, Hyundai Motor closed at 224,000 KRW, down 20,000 KRW (8.2%) from the previous day on the KOSPI market. Kia also ended trading at 96,300 KRW, down 10.08%. This marks the largest drop since the COVID-19 shock on March 19, 2020.
The sharp decline is interpreted as being influenced by fears of a recession originating from the U.S. On July 1 (local time), the U.S. released its July Manufacturing Purchasing Managers' Index (PMI), which showed unexpectedly weak figures. Additionally, the July unemployment rate reached its highest level in about three years, spreading concerns about an economic downturn.
However, the fundamentals of Hyundai Motor and Kia are considered solid. Hyundai Motor recorded sales of 45.0206 trillion KRW and operating profit of 4.2791 trillion KRW in the second quarter of this year, marking the best quarterly performance ever.
In particular, Hyundai Motor and Kia demonstrated cumulative sales growth in the U.S. electric vehicle market from January to July this year. According to the Korea Automobile Manufacturers Association (KAMA), Hyundai Motor sold 37,673 electric vehicles in the U.S. during this period, an 18.1% increase compared to the same period last year. Kia also sold 33,957 electric vehicles.
Yoo Ji-woong, a researcher at Daol Investment & Securities, stated, “Value-up action plans and response strategies to changes in U.S. electric vehicle policies will be triggers for stock prices,” adding, “Annual share buybacks and cancellations worth about 1 trillion KRW are expected.”
Kim Sung-rae, a researcher at Hanwha Investment & Securities, forecasted, “The expansion of HEV sales in the second half of the year and the mix effect centered on high value-added SUVs will continue,” and “Strong performance in the financial sector will also positively impact future profit and loss trends.”
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