"Lower Q2 operating profit outlook, but '4.2 million hynix' remains valid"... Hyundai Motor Company keeps buy rating at 740,000 won [Stocktopia]

[Financial News] Here is a roundup of major brokerage reports as of the morning of July 14.
SK hynix lowered its second-quarter operating profit forecast due to falling average selling prices for DRAM and NAND, but kept its target price at 4.2 million won, citing the still-solid industry backdrop.
Hyundai Motor Company is expected to miss market estimates in the second quarter because of weak global sales, but a rebound is anticipated in the second half on the back of new-model effects and robotics momentum. Hyosung Heavy Industries is also seen widening its profit improvement, supported by its unrivaled competitiveness in the North American extra-high-voltage market.
◆SK hynix (000660)― Mirae Asset Securities / Analyst Kim Young-gun
- Target price: 4.2 million won (unchanged) | Previous close: 1.845 million won
- Investment rating: Buy (unchanged)
Mirae Asset Securities cut its second-quarter operating profit estimate for SK hynix by 12%, but left the target price unchanged at 4.2 million won. The revision reflects lower average selling prices for DRAM and NAND, yet the firm said the memory market outlook and earnings growth next year remain positive.
Analyst Kim Young-gun explained SK hynix's earnings by saying, "It appears that about 50% of sales were secured through long-term supply agreements (LTA), which adds stability while also reducing exposure to speculative demand that fears procurement uncertainty."
He added, "While conventional memory prices are broadly holding up, high-bandwidth memory (HBM) is expected to lead price increases." He also emphasized that "despite the sharp stock correction, spot memory prices are actually showing strength."
The analysis says the medium- to long-term earnings expansion trend will continue as supply remains tight amid capital spending increases by Big Tech companies.※ High-bandwidth memory (HBM)This is a high-performance memory semiconductor that stacks DRAM chips vertically to dramatically improve data processing speed. It is considered an essential component for computing in AI servers.
◆Hyundai Motor Company (005380)― Daishin Securities / Analyst Kim Gui-yeon
- Target price: 740,000 won (down 3.9%, from 770,000 won) | Previous close: 440,000 won
- Investment rating: Buy (unchanged)
Daishin Securities lowered its target price for Hyundai Motor Company to 740,000 won, saying second-quarter results are likely to fall short of market expectations because of weaker global sales and higher incentives.
Analyst Kim Gui-yeon said, "Second-quarter global wholesale sales are estimated at about 970,000 units, down 6% from a year earlier." She added that profitability was also hurt by increased discounting and promotions as some major models have aged and lost some competitiveness.
Although there were positive factors such as a stronger won and higher sales of premium vehicles in North America, the decline in profit from weak sales and rising incentives was larger, the report said.
Still, the firm expects a full-fledged improvement in earnings from the second half.
Kim said, "The effects of new models such as the Hyundai Grandeur, Hyundai Tucson and Hyundai Elantra will begin to be fully reflected, and a base effect from relatively weak results last year will also help improve earnings." He added that "the possibility of new business strategies or shareholder return policies being unveiled at next month's CEO Investor Day could also be a positive factor."
◆Hyosung Heavy Industries (298040)― Yuanta Securities Korea / Analyst Son Hyun-jung
- Target price: 5 million won (unchanged) | Previous close: 2.666 million won
- Investment rating: Buy (unchanged)
Yuanta Securities Korea said that despite the recent stock correction, Hyosung Heavy Industries' earnings strength and order visibility remain intact, and it kept its target price at 5 million won, implying 87.6% upside from the previous close.
Analyst Son Hyun-jung said, "As U.S.-bound shipments are reflected in the second quarter and the high-margin order backlog centered on North American extra-high-voltage transformers turns into revenue, the scale of profit improvement will expand." She added that "the heavy industries division is continuing to benefit from a favorable product mix for North American deliveries, while the construction division is also moving out of losses and will help stabilize consolidated earnings."
In particular, the joint venture (JV) for extra-high-voltage circuit breakers established with Quanta Services, a U.S. power and energy infrastructure company, was highlighted as a new growth driver.
Son said, "Among domestic power equipment makers, Hyosung Heavy Industries is the only company that has secured production bases in the United States for both extra-high-voltage transformers and extra-high-voltage circuit breakers." She added, "Through this JV, it has secured a channel to access demand for extra-high-voltage circuit breakers for Big Tech data centers."

sms@fnnews.com Sung Min-seo Reporter