Heungkuk Securities: “Hyundai Motor Company to Bottom Out in Q3 and Rebound... Profitability to Recover on HEVs and Robotics”

[Financial News] It has been forecast that Hyundai Motor Company’s profitability will gradually improve, having bottomed out in the third and fourth quarters of last year. Analysts say that with the full application of the 15% tariff, demand for low-margin Electric Vehicles (EV) is shifting toward high-margin Hybrid Electric Vehicles (HEV), while the robotics business is entering a phase in which a substantial portion is becoming a reality.
On the 14th, Heungkuk Securities projected Hyundai Motor Company’s fourth-quarter revenue last year at 47.4 trillion won, up 1.5% from the previous quarter. Operating profit was forecast at 2.7 trillion won, a 6.8% increase from the third quarter.
Gunwoo Ma, an analyst at Heungkuk Securities, said, “Wholesale sales volume excluding China came to 996,000 units, slightly below the previous estimate of 1,056,000 units, but favorable foreign exchange effects and an improved mix centered on HEVs are expected to offset this, allowing revenue to meet market expectations.”
He added, “Regarding tariffs, it was agreed that the 15% rate would be applied retroactively from November, but due to the impact of existing inventory, we judge that the cost-saving effect within this quarter will be limited.”
For this year, Heungkuk Securities forecast revenue to reach 193.1 trillion won, up 3.4% from a year earlier. Operating profit over the same period is expected to rise 7% to 13.5 trillion won.
Gunwoo Ma explained, “This target takes into account an expected increase in sales in Europe and India, as well as a slowdown in EV demand due to the end of EV tax incentives in the United States and an oversupply environment in China,” adding, “A conservative approach is needed regarding top-line growth driven by higher sales volume.”
Heungkuk Securities assessed that, through the latest Consumer Electronics Show (CES), much of the uncertainty surrounding Hyundai Motor Company’s software capabilities has been resolved via collaboration with Google DeepMind. In addition, the company has presented a concrete timeline for mass production of 30,000 units per year starting in 2028 and for deployment on manufacturing sites, leading to the analysis that Hyundai Motor Company’s long-term growth potential in the era of Physical AI has become more visible.
Ma said, “Hyundai Motor Group (HMG) owns Boston Dynamics within the group, so it has a structure that allows it to internally absorb a certain level of demand by directly deploying mass-produced Humanoid robots into its automobile production processes.”
He continued, “In the short term, there may be share price volatility among affiliates, but the medium- to long-term trajectory of corporate value growth driven by the full-fledged advent of the Physical AI era remains solid.”
eastcold@fnnews.com Kim Dong-chan Reporter