[Stock in Focus] Shipping Stocks Surge Amid U.S.-Iran War, but Only Hyundai Glovis Plunges

Included in Hyundai Motor Group's Correction
Operating 11 Oil Tankers...Possible Revaluation as a Shipping Stock

While shipping company stocks are showing strength as the Strait of Hormuz has been blocked due to the war between the United States and Iran, Hyundai Glovis shares are plummeting. The selling trend continues as Hyundai Glovis is being grouped with Hyundai Motor Group stocks rather than with shipping stocks. Some, however, view this as an opportunity, highlighting its undervaluation appeal.

As of 11:12 a.m. on March 3, Hyundai Glovis shares were trading at 265,500 won, down 8.29% from the previous trading day. While shipping stocks are generally showing strong gains, Hyundai Glovis is the only one on a downward trend.

The atmosphere contrasts with the surge in shipping stocks, which is driven by expectations of a spike in freight rates due to supply chain bottlenecks after Iran completely closed the Strait of Hormuz, the world’s largest oil transport route. In fact, on this day, major shipping stocks such as HMM (up 11.24%), Pan Ocean (up 9.09%), and Korea Line Corporation (up 24.65%) are soaring.

This trend is interpreted as the impact of the correction in Hyundai Motor Group stocks spilling over to Hyundai Glovis. As of 11:16 a.m. on the same day, Hyundai Motor shares were down 7.12% from the previous trading day, at 626,000 won. Hyundai Mobis (down 6.09%) and Hyundai Autoever (down 7.88%) also saw simultaneous declines.

However, since Hyundai Glovis is still posting record-high results and expanding its shipping business, there remains a possibility that it could be reevaluated as a shipping stock. Kang Sungjin, a researcher at KB Securities, explained, “Disruptions in maritime routes typically lead to higher shipping rates, so shipping companies may be expected to benefit.”

Hyundai Glovis posted its highest-ever performance last year, with sales of 29.5664 trillion won and operating profit of 2.073 trillion won. The shipping division’s operating profit also increased by 104% year-on-year to 745.1 billion won. Recently, the company has been strengthening its portfolio by expanding beyond finished vehicle maritime transport to crude oil and gas carrier businesses.