Hyundai Motor Group Expected to Inject 500 Billion KRW into Boston Dynamics

On June 4, Hana Securities projected that Hyundai Motor Group would inject approximately 500 billion KRW into Boston Dynamics during the second quarter. Hyundai Motor Group currently holds a 65.7% stake in Boston Dynamics, and when including the personal stake of Chairman Euisun Chung, the total ownership rises to 87.6%.

In the first quarter of this year, Boston Dynamics recorded sales of 35.7 billion KRW and a net loss of 119.7 billion KRW. As of the end of the first quarter, the company reported total assets of 429.8 billion KRW, liabilities of 355.5 billion KRW, and shareholders’ equity had decreased to 74.2 billion KRW. Since Boston Dynamics has been posting net losses of around 100 billion KRW each quarter, a paid-in capital increase is deemed essential within the second quarter.

Hana Securities noted that, following the pattern of the past three years, Hyundai Motor Group and Chairman Euisun Chung are expected to cover a capital increase of approximately 400 to 500 billion KRW. If Boston Dynamics raises 500 billion KRW, HMG Global (which owns 54.75% of Boston Dynamics) would contribute about 312.5 billion KRW, Hyundai Glovis (holding 10.95%) would contribute 62.5 billion KRW, and Chairman Euisun Chung (holding 21.9%) would contribute about 125 billion KRW. In this scenario, the combined stake of Hyundai Motor Group and related parties would rise to around 90%. Meanwhile, SoftBank, which currently holds a 12.41% stake and has put options on its shares exercisable in June this year and June next year, would see its stake decrease to around 10%.

Meanwhile, HMG Global?the largest shareholder of Boston Dynamics, with Hyundai Motor, Kia, and Hyundai Mobis holding 49.5%, 30.5%, and 20.0% stakes respectively?has already completed a capital increase of approximately 450 billion KRW among its shareholders during the first quarter.

Boston Dynamics (BD) is currently commercializing and selling its quadruped robot Spot and logistics automation robot Stretch. However, the core focus is the humanoid robot Atlas. In the first half of last year, Boston Dynamics unveiled the second-generation electric Atlas, and is now concentrating on enhancing its artificial intelligence (AI) capabilities based on its advanced hardware (HW) control technology. In 2022, the company established the Boston Dynamics AI Institute (now the Robotics and AI Institute) as an affiliate, and last year announced plans to accelerate the development of a general-purpose humanoid by leveraging large behavior models (LBM) in collaboration with the Toyota Research Institute (TRI).

Within this year, Boston Dynamics plans to deploy Atlas at Hyundai Motor Group factories to gather empirical data and further advance its performance. Hyundai Motor Group intends to purchase tens of thousands of robots, including Atlas, from Boston Dynamics over the next three years. Song Sunjae, an analyst at Hana Securities, commented, "The external commercialization of Atlas is expected around 2028," adding, "Although Boston Dynamics will continue to post losses for the time being due to large-scale R&D investments, the company's value is expected to rise as Atlas's performance improves and the commercialization timeline approaches."