[Click eStock] "Hyundai Motor, Subject to US Tariff Impact from Q2"

On the 8th, SK Securities forecasted that Hyundai Motor Company would be affected by the 25% tariff imposed by the United States starting from the second quarter of this year.

Yoon Hyuk-jin, a researcher at SK Securities, stated, "Due to the 25% tariff imposed by the United States, we are revising down the operating profit forecast for the second quarter of this year from the previous 3.9 trillion KRW to 2.9 trillion KRW," adding, "If sales volume in the U.S. remains at last year's level without any price increase, the annual operating profit is expected to decrease by approximately 5.2 trillion KRW."

He continued, "If sales prices increase by 10% and U.S. export volume decreases by 20% (110,000 units), operating profit will decrease by about 3.8 trillion KRW annually," and added, "In the short term, the impact will be mitigated by non-price factors such as reduced incentives and diminished benefits."

He emphasized, "Due to rising parts costs for vehicles produced in the U.S., price increases are ultimately expected," and noted, "In addition to the contraction of the U.S. automobile market, Ford, which has the highest proportion of U.S. production, is conducting aggressive marketing by selling vehicles to employees at employee prices."

Researcher Yoon estimated that "Hyundai Motor Company will achieve sales of 187.4 trillion KRW and operating profit of 12.5 trillion KRW this year," and analyzed, "We incorporated an increase in costs related to tariffs amounting to 2.4 trillion KRW, resulting in a 13.7% downward revision of the operating profit forecast." He also stated, "Accordingly, the target stock price is lowered from 330,000 KRW to 270,000 KRW," explaining, "A valuation of a price-to-earnings ratio (PER) of 4 times and shareholder-friendly policies such as share buybacks will support the downside."