"Hyundai Motor to Rebound in the Second Half After Q2 Production Disruptions; RMAC Launch to Be the Catalyst": LS Securities

[Financial News] Despite production disruptions in the second quarter, Hyundai Motor is expected to post results in line with market consensus, and momentum is likely to accelerate in the second half, led by the launch of RMAC and the establishment of a robot production subsidiary, according to an analysis.
On the 8th, LS Securities projected that Hyundai Motor's second-quarter revenue would rise 0.7% from a year earlier to 48.62 trillion won, while operating profit would fall 13.7% to 3.11 trillion won.
LS Securities analyst Lee Byung-geun explained, "Operating profit by segment is expected to come in at 220 billion won for the automotive division and 64.75 billion won for finance."
The main reason for the weak second quarter was production disruptions. Fires at Anjeon Industrial and the India plant reduced global wholesale sales to 990,000 units, while sales excluding China came to 968,000 units. The production shortfall was estimated at around 20,000 units.
Lee said, "From July, production should begin to normalize as substitute parts are supplied by Chinese component makers," adding that "in the second half, exchange-rate effects and a better mix driven by higher HEV sales are expected to become more pronounced."
The burden from warranty costs tied to the rise in the quarter-end exchange rate is estimated at 100 billion to 150 billion won, but the benefit from improved profitability due to the higher average exchange rate is expected to offset that, bringing the total foreign-exchange effect to about 400 billion won.
Key momentum drivers in the second half include Hyundai Motor Group's RMAC launch in August and the establishment of a robot production subsidiary in the fourth quarter.
Lee said, "With SoftBank Group's exit from its Boston Dynamics stake, internal shareholding adjustments have been completed. From here, a capital increase targeting external strategic investors cannot be ruled out, as it could simultaneously support higher corporate value and secure funds for mass production," adding that "this is also expected to serve as a major catalyst in the second half."
eastcold@fnnews.com Kim Dong-chan Reporter