[Click eStock] "SNT Motiv: Investment Appeal Enhanced by Growth Momentum and Dividends... Target Price Raised"

Target Price Raised from 35,000 Won to 40,000 Won
Highlighting Investment Appeal with Growth Momentum and Dividends

On September 3, Hanwha Investment & Securities raised its target price for SNT Motiv from 35,000 won to 40,000 won, citing the company’s mid- to long-term growth momentum and dividends as factors enhancing its investment appeal. The firm maintained its "Buy" investment rating.

Kim Seongrae, a researcher at Hanwha Investment & Securities, stated, "Mid- to long-term growth momentum driven by the expansion of software-defined vehicles (SDV) and defense demand, along with quarterly dividends implemented from this year, will highlight SNT Motiv’s investment attractiveness." He added, "We believe a revaluation of the company’s valuation is appropriate, considering the mid- to long-term growth momentum centered on motors and defense, as well as the increased shareholder returns, and have therefore raised our target price."

The company is expected to continue benefiting from its focus on motors. Kim explained, "SNT Motiv’s motor-centric product portfolio is expanding into next-generation chassis systems (X-By Wire) for SDVs and autonomous vehicles, and further into robot actuators. This suggests that the company’s motor-centric advantages in the transition to future mobility are likely to persist." He continued, "In the defense and specialty sectors, sales in the first quarter of this year were 87.1 billion won, a 15.4% decrease year-on-year. However, with sales expected to be concentrated in the second half of the year and ongoing geopolitical uncertainties expanding order opportunities, growth is expected to be sustained."

The company is also expected to increase its local order volume by securing a production base in the United States. SNT Motiv recently acquired a factory site in Louisiana to respond to U.S. tariffs. Kim commented, "Currently, most of SNT Motiv’s direct sales to the U.S. are under EXE (Ex-Works) terms, so the direct impact of tariffs is limited. However, considering major clients such as General Motors and Hyundai Motor Group are expanding their production investments in the U.S., securing a local base was necessary to maintain customers, reduce exposure to tariff risks for future U.S. sales, and prepare for automakers’ efforts to find alternative sourcing options to alleviate tariff burdens." He added, "While the scale of local production capacity is still under review, once the Louisiana facility begins operations early next year, it will help the company proactively address U.S. supply chain restructuring risks and expand local order volumes."

Starting this year, SNT Motiv has implemented quarterly dividends, paying 900 won in the first half and recording a payout ratio of 60.5% on a half-year basis. Kim stated, "With quarterly dividends of 300 won per share in the second half, the annual dividend per share is expected to reach 1,500 won, with a payout ratio of 39.3% for the year."