Hyundai Motor Focuses on 'CEO Investor Day'... Will the Stock Price Rise Again?

Expectations for Additional Shareholder Return Policy Announcement
EV and HEV Business Strategy Also Key Points
"If Expectations Are Not Met, Volatility May Increase"

Hyundai Motor's 'CEO Investor Day (CID)' is drawing market attention. Expectations are high that the event will reveal enhanced shareholder return policies and concrete business strategies. However, there is analysis that if the content of the CID falls short of expectations, stock price volatility could increase.

According to the Korea Exchange on the 28th, Hyundai Motor recorded 247,500 KRW, down 0.80% from the previous trading day. Although it reached an intraday high of 299,500 KRW in June, setting a 52-week high, it has been declining due to concerns over economic recession and peak earnings. Recently, as the stock price has somewhat recovered from its decline, the market appears to be cautiously waiting for the CID, which could significantly influence future investments.

According to industry sources, Hyundai Motor will hold the CID at the Conrad Hotel in Yeouido, Seoul, on the day and is expected to disclose key business strategies. The CID has been held five times in total from February 2019 to June last year. The main topics covered in previous CIDs included mid-to-long-term management and new business strategies, as well as financial goals.

Investors are expecting additional shareholder return policies through this CID. Hyundai Motor's dividend payout ratio currently stands at about 24%, which is lower than the global competitors' average of 28%. Kim Kwang-soo, a researcher at LS Securities, said, "Considering the need for investment in new businesses such as electric vehicles and autonomous driving, Hyundai Motor is expected to announce a share buyback program worth up to 1.5 trillion KRW. If shares are repurchased to that extent, the shareholder return ratio will rise to 38% next year. In the long term, it is expected to expand to 40%, similar to Toyota's shareholder return ratio."

In the securities industry, the main points to check at the CID include shareholder return policies along with future production strategies for electric vehicles (EV) and hybrid electric vehicles (HEV). Kim Chang-ho, a researcher at Korea Investment & Securities, analyzed, "The Hyundai Motor Group Meta Plant America (HMGMA), originally planned to be used as an EV-exclusive factory, will also produce HEVs. To secure profitability at a plant with a capacity of 300,000 units, maintaining operating rates is essential. Since the growth rate of EVs alone is not high enough to fill the lineup, there is a possibility of adding HEVs, which have strong demand."

Meanwhile, there is also analysis that stock price volatility could increase as the short-term catalyst of the CID disappears. Kim Gwi-yeon, a researcher at Daishin Securities, pointed out, "Since foreign demand has flowed in since the end of last year, if the content falls short of market expectations, negative factors such as recent exchange rate fluctuations and the seasonal low in the third quarter could combine to cause stock price weakness." He added, "However, if the market expectations are met, interest is expected to expand toward the end of the year along with catalysts such as dividends, the India IPO, the operation of the North American Meta Plant, and robotaxi."