[Click eStock] "Hyundai Mobis, US Tariff Concerns Down·AS Demand Up"

Tariff Risk Eased by Euisun Chung's Investment Plan Announcement
U.S. AS Demand Rises Amid Economic Slowdown... High Exchange Rate Also a Positive Factor

In the first quarter of this year, Hyundai Mobis is expected to achieve strong performance based on increased demand for after-sales service (AS). Furthermore, with reduced uncertainty over U.S. tariffs at the Hyundai Motor Group level, collaboration with finished car manufacturers is anticipated to be highlighted.

On the 26th, DS Investment & Securities maintained its 'Buy' rating on Hyundai Mobis for these reasons and raised the target price by 9.1% to 360,000 KRW. The closing price the previous day was 281,500 KRW.

First-quarter earnings are estimated at sales of 14.089 trillion KRW and operating profit of 809.2 billion KRW. Compared to the same period last year, sales increased by 1.6% and operating profit by 49.1%. It is viewed that strong performance is possible due to increased AS demand amid the U.S. economic slowdown and the high exchange rate of the Korean won against the U.S. dollar. Although the effect of logistics cost increases from July last year will be reflected starting in the first quarter of this year, it is considered offsettable by a decrease in the proportion of air logistics.

Module segment performance is expected to be similar to the first quarter of last year due to a reduction in Hyundai Motor Group volumes. Electrification faces weaknesses this year due to the transition to cell self-supply across all models and weak domestic demand, but core parts are expected to continue growing based on demand for electronic components.

Uncertainty over U.S. tariff policies under President Donald Trump has also lessened. Hyundai Motor Group Chairman Chung Euisun personally announced a $21 billion (approximately 31 trillion KRW) investment plan in the U.S. at the White House, receiving a warm welcome from the U.S. government. Tariffs on parts or Hyundai Motor Group finished car volumes are scheduled to be finalized on the 2nd of next month. Since President Trump stated, "If there are licensing issues, come to me. I will resolve them immediately," concerns over tariffs are largely alleviated.

Choi Taeyong, a researcher at DS Investment & Securities, explained, "While a favorable environment for AS demand is expected due to the U.S. economic slowdown, Hyundai Mobis's price-to-earnings ratio (PER) of 5.8 times is excessively undervalued compared to AutoZone, the leading U.S. AS business. We raise the target price to 360,000 KRW and present it as the top pick within the sector."