Benefiting from Automation Investments under the Yellow Envelope Act... Hyundai Movex Reassessed

Hit 7,680 Won Intraday on the 5th, Setting a New All-Time High
Share Price Up 60% After Passage of the Yellow Envelope Act
Supplier of Machinery and Operational Software for Logistics Automation

Since the passage of the Yellow Envelope Act (the amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) in the National Assembly, the stock prices of robot-related companies in the domestic stock market have been on an upward trajectory. Hyundai Movex, which supplies machinery, equipment, and operating software necessary for logistics automation processes, has reached an all-time high in its stock price.

According to the financial investment industry on September 8, Hyundai Movex's stock price surged by 58.4% in just 10 trading days from August 25 to September 5. On September 5, it hit a record high of 7,680 won during intraday trading.

Hyundai Movex originated from the logistics division of Hyundai Elevator. In 2017, Hyundai Movex was established by separating the logistics automation and screen door business units from Hyundai Elevator. In 2018, it merged with Hyundai U&I, an IT services company within the Hyundai Group. Based on artificial intelligence (AI) and robotics technologies, the company is evolving into an advanced smart logistics solutions provider. Leveraging its accumulated logistics automation expertise in Korea, Hyundai Movex has actively expanded into overseas markets, undertaking large-scale projects in countries such as Vietnam, Indonesia, Cambodia, China, India, Australia, and Bangladesh. Hyundai Elevator currently holds a 55.9% stake in Hyundai Movex.

In the industry, rising labor costs and workforce shortages are driving a trend toward expanding automation processes when building new factories or logistics warehouses. This is fueling the growth of Hyundai Movex's logistics automation division. From 2018 to 2022, the company’s average annual new orders amounted to approximately 173 billion won, but last year, new orders increased to 392.7 billion won. There is also a growing number of individual projects exceeding 50 billion won in value.

Choi Seunghwan, a researcher at Shinhan Investment Corp., stated, "The Yellow Envelope Act is just one of many factors accelerating the growth of the robotics industry," adding, "Given the structural issues of labor shortages and rising labor costs faced by domestic companies, expanding investment in robotics is inevitable."

In the first half of this year, Hyundai Movex recorded sales of 176.6 billion won and operating profit of 9.6 billion won. Compared to the same period last year, sales increased by 32.3% and operating profit rose by 6.8%. Second quarter sales were higher than those of the first quarter, reaching 98.9 billion won, a 36.1% increase year-on-year. However, operating profit decreased by 8.2% to 4.5 billion won. This decline in profit was attributed to a drop in the won-dollar exchange rate and an increase in outsourcing costs.

The company expects better performance in the second half of the year compared to the first half. As the exchange rate stabilizes and new orders are reflected in sales, profitability is expected to improve. Jung Yeonseung, a researcher at NH Investment & Securities, predicted, "With the increase in order backlog, the trend of performance improvement will continue through 2027," adding, "As of the first half of this year, the order backlog stands at 421.5 billion won."

In Yeouido’s securities industry, there is an outlook that Hyundai Movex will continue to win logistics automation projects related to energy storage systems (ESS), food and beverage (F&B), cosmetics, and tire production. Hyundai Movex is currently bidding on multiple orders, each with a contract size exceeding 50 billion won. The results of these bids are expected to be confirmed in the second half of this year. Researcher Jung analyzed, "Hyundai Movex has carried out projects across various industries such as food and beverage and tires in the past," adding, "Unlike domestic competitors, the company’s range of orders is diverse."