[Click eStock] "Hyundai Motor to Overcome Uncertainty Head-On, Expected to Break Quarterly Sales Record"

Record-High Q1 Sales Expected Due to Strong Won-Dollar Exchange Rate and Expanded EV Sales
Tariff Uncertainty Eased... Collaboration with GM and Others in the Spotlight

Hyundai Motor Company is expected to achieve record-breaking performance in the first quarter of this year by directly overcoming external uncertainties such as the U.S. tariff policy.

On the 27th, Hanwha Investment & Securities maintained Hyundai Motor's target stock price at 310,000 KRW and a 'Buy' investment rating based on this background. The closing price the previous day was 222,000 KRW.

Hanwha Investment & Securities forecast that Hyundai Motor will record sales of 44.116 trillion KRW and an operating profit of 3.551 trillion KRW in the first quarter of this year. Sales are expected to increase by 8.5% year-on-year, achieving the highest quarterly sales ever. Although sales volume is expected to decrease by 0.9%, the increase in the proportion of electric vehicles, which have higher selling prices compared to internal combustion engines, is expected to maintain the sales growth trend. Additionally, the trend of the won-dollar exchange rate exceeding the company's planned business rate of around 1,450 KRW is also expected to contribute to sales growth. However, increased operating incentives due to intensified competition in key markets such as the U.S. and Europe may act as a constraint on sales expansion.

Operating profit is expected to slightly decrease by 0.2% due to the base effect from the record-breaking performance in the same period last year. Nevertheless, profitability is expected to exceed the early-year estimates. Despite the rising trend of non-ferrous metals such as aluminum and copper, raw material prices are expected to stabilize overall. Although selling, general and administrative expenses and quality costs increased due to the won-dollar exchange rate in the 1,470 KRW range at the end of last year, this effect is expected to ease in the first quarter of this year.

However, profitability may slightly falter as the ratio of development costs to sales increases by 0.4 percentage points due to research and development (R&D) investments related to software-defined vehicles (SDV). In the financial sector as well, proactive setting of allowance for doubtful accounts and other factors are expected to cause the first quarter operating profit margin to fall by 0.7 percentage points year-on-year to 8.0%.

Han Jae-sun, Chairman of Hyundai Motor Group, was viewed positively for announcing a local investment plan worth 21 billion USD (approximately 31 trillion KRW) at the White House. It is seen as a direct breakthrough and resolution of external uncertainties such as the 25% tariff imposition by U.S. President Donald Trump earlier this year. Starting production of the Ioniq 5 and Ioniq 9 at local U.S. factories, along with launching the Palisade in the U.S. and expanding sales of the Casper EV in Europe, is expected to overcome the limitations of volume growth.

Kim Seong-rae, a researcher at Hanwha Investment & Securities, explained, "After President Trump's tariff policy announcement on the 2nd of next month, specific plans for business cooperation with global companies such as GM and Waymo will be gradually presented," adding, "This will reignite the upward momentum of Hyundai Motor's stock price, which had been depressed due to macroeconomic and policy uncertainties."