[Click eStock] "HL Mando's Q4 Results Solid... Essential Component Supplier for Robotics Industry"

Maintains "Buy" Rating
Raises Target Price to 80,000 Won

On January 26, NH Investment & Securities maintained its "Buy" investment rating on HL Mando and raised its target price to 80,000 won.

On this day, analyst Sky Ha of NH Investment & Securities stated, "HL Mando is emerging as an essential component supplier in the fields of robotaxi and robotics." The target price was calculated by applying a target price-to-earnings ratio (PER) of 15 times to the 12-month forward earnings per share (EPS). The target PER reflects a 30% premium over the average of global component manufacturer peers.

Analyst Ha estimated that HL Mando’s sales and operating profit in the fourth quarter of last year would be 2.5325 trillion won and 90.3 billion won, respectively. He explained, "Sales volume has been better than expected due to increased electric vehicle sales incentives from major North American clients," but also noted, "Profitability improvement is expected to become full-fledged starting in the first quarter of this year, as the schedule for tariff refunds has been somewhat delayed."

Regarding net profit, he stated that it is expected to fall short of consensus, as approximately 5.5 billion won in one-off provisions in the fourth quarter and valuation losses from iMotion, HL Mando’s autonomous driving technology subsidiary, will be reflected.

Analyst Ha said, "HL Mando supplies actuators for Spot, the quadruped robot of Boston Dynamics, a robotics company under Hyundai Motor Group, and is also developing actuators for humanoids." He added, "The company is conducting PoC (Proof of Concept) demonstration evaluations with multiple clients, aiming for mass production in 2028." He further explained, "Development is focused on cost, durability, and safety to ensure suitability for mass production," and predicted that HL Mando’s actuator competitiveness will stand out if production volumes for humanoid companies increase in the future.

He also cited the market expansion of North American robotaxi companies as one of the performance drivers. Analyst Ha explained, "Because robotaxis must operate 24 hours a day, the requirements for component quality are higher, and both hardware manufacturing capability and software development competence are essential." He analyzed that HL Mando is already supplying components and software for the robotaxi business of leading electric vehicle companies, and can expand its customer base further based on these references.