[Click eStock] "Hyundai Motor Remains Undervalued Even With 25% Tariffs"

On July 25, Hana Securities stated that Hyundai Motor is expected to see further deterioration in profitability in the second half of the year, as the impact of tariffs will be fully reflected after the third quarter amid the current downward trend in exchange rates. However, the company also anticipated that Hyundai Motor could mitigate these effects by implementing measures such as price increases, cost reductions, and expanding localization in response to tariffs. The investment opinion was maintained at 'Buy,' with a target price of 250,000 won.

In the second quarter, Hyundai Motor recorded sales of 48.2867 trillion won, a 7.3% increase compared to the same period last year. However, operating profit decreased by 15.8% to 3.6016 trillion won from 4.2791 trillion won a year earlier. Net profit was tallied at 3.2503 trillion won, down 22.1% from a year ago. Despite the costs of US tariffs, the positive impact of exchange rates helped the results meet market expectations, and the performance was assessed as better than the recent lowered concerns.

Song Sunjae, a researcher at Hana Securities, commented, "Hyundai Motor reflected 828 billion won in tariff costs in the second quarter, and it is expected that the full impact of tariffs will be reflected in the second half of the year." He added, "If the governments of both countries negotiate a reduction in tariff rates, the currently diminished profitability under the 25% tariff rate could recover."

Hyundai Motor announced that, in response to tariffs, it will not proactively raise selling prices but will adopt a 'fast follower' strategy that takes into account competitors and market conditions. At the same time, the company will pursue production efficiency through measures such as reducing material and processing costs and changing parts sourcing. In the long term, Hyundai Motor plans to respond by strategically localizing parts.