[Click eStock] "Structural Expansion of Robot Demand... Spotlight on Robotis and Hyundai Movex"

On September 2, Shinhan Investment & Securities stated, "Structurally, the robotics industry in Korea is bound to grow," and named Robotis and Hyundai Movex as their top picks in the sector.

On this day, Choi Seunghwan, a research analyst at Shinhan Investment & Securities, remarked, "For now, it is necessary to be selective and focused when it comes to robotics stocks. Attention should be paid to companies in the humanoid and intelligent robot component value chain, companies that have received equity investments from large corporations, and those that have achieved sales growth in specialized areas such as logistics."

Choi emphasized that the growth of the robotics industry is inevitable, regardless of the passage of the Yellow Envelope Act. He explained, "On August 24, the Yellow Envelope Act passed the National Assembly, and the next day, the stock prices of major robotics companies rose by an average of 10%. Recently, with increased corporate responsibility for safety, there is also the added risk of potential labor disputes." However, he pointed out, "The Yellow Envelope Act is just one of many factors accelerating the growth of the robotics industry."

He continued, "Given the structural issues faced by Korean companies, such as labor shortages and rising labor costs, expanding investment in robotics is inevitable. Korea has the highest industrial robot penetration rate in the world-approximately 1,012 units per 10,000 manufacturing workers-and serves as the world's premier testbed, with a robust manufacturing sector."

Due to global interest rate rigidity and geopolitical risks, the pace of robot installation still falls short of market expectations. Choi noted, "The ROI (return on investment) of robots is not yet high enough to fully replace human labor, making corporate CAPEX (capital expenditures) for robotics highly sensitive to economic conditions. In the second quarter of this year, only 5 out of 19 companies in the domestic robotics sector achieved sales growth."

Looking at the details, the humanoid (Rainbow Robotics), precision actuator (Robotis), and logistics automation (Hyundai Movex, Cmes, Klobot) segments performed well, driven by active research and development (R&D) and increased investment from client companies. In contrast, the collaborative robot (Doosan Robotics, Neuromeka) and traditional industrial robot segments saw very poor results due to the economic slowdown and tariff uncertainties.

Robotis and Hyundai Movex were highlighted as the top picks. Choi explained, "Robotis has decided to raise 100 billion won to prepare for the explosive increase in demand for high-precision actuators in the era of physical artificial intelligence (AI). Hyundai Movex saw its sales increase by 32% in the first half of the year, and multiple order wins are expected in the second half."

Doosan Robotics, Cmes, and JVM were mentioned as companies of interest. He said, "Doosan Robotics and Cmes are expected to perform better next year than this year. Although JVM is classified as a medical device company, it is essentially a robotics company with extensive robot and automation technology. A revaluation is expected due to its continued profit growth since the COVID-19 pandemic."

Additionally, Choi added, "Although collaborative robot and industrial robot companies are currently being overlooked, attention should be paid to their potential rebound starting in the second half of next year as ROI improves."