[Click eStock] "Hyundai AutoEver Expected to Be Re-rated on New Business Momentum... Target Price Up"

On August 6, Shinhan Investment Corp. raised its target price for Hyundai AutoEver from 180,000 won to 200,000 won, citing expectations of a valuation re-rating driven by the emergence of new business opportunities. The investment opinion was maintained at 'Buy'.

Kangho Oh, a researcher at Shinhan Investment Corp., stated, "We have raised the target price by 11% compared to the previous level," adding, "All business divisions have succeeded in achieving earnings growth, and with improved profitability as well as the emergence of future growth drivers such as robotics and vehicle software (SW), a valuation re-rating is anticipated."

In the second quarter of this year, Hyundai AutoEver recorded sales of 1.0412 trillion won, up 13.5% year-on-year, and operating profit of 81.4 billion won, up 18.7%. Oh analyzed, "All business divisions saw sales growth in the second quarter, resulting in a surprise earnings beat," and added, "After weak performance in the first quarter, the company achieved a rebound, driven by a 17% increase in system integration and operation (SI) sales and a 14% increase in IT outsourcing (ITO) sales."

Despite concerns over tariffs, the company has demonstrated its growth resilience. Oh commented, "Despite tariff concerns, the company has proven its growth resilience through its first-half results. While performance volatility may occur in the second half due to group company investments and project revenue recognition, the recent spotlight on new businesses makes Hyundai AutoEver a domestic IT service company to watch in the second half."

Growth momentum is expected to become more prominent in the second half. Oh pointed out, "The second half will be the timing for growth momentum to stand out, which will lead to a valuation re-rating," and added, "Key points of focus include the opening of the autonomous driving market, new growth drivers such as robotics and smart factories, and the growth story of SI and ITO businesses including cloud."