"Hyundai AutoEver Is Transforming into a Software Integration Provider; Improving Profitability Is the Challenge"

[Financial News] LS Securities said Hyundai AutoEver is transforming from an automotive middleware supplier into a software integration provider responsible for software-defined vehicles (SDVs), but noted that turning this transformation into improved profitability is the key challenge. The brokerage maintained its "Buy" rating and target price of KRW 540,000.
Lee Byung-geun, an analyst at LS Securities, said, "Hyundai AutoEver is transforming into a software integration provider responsible for the development, integration, verification, and operation of SDVs for Hyundai Motor Group. It has been confirmed that the company is participating in system architecture design, a common development environment, and the integration of external software."
The analyst was particularly positive about the specific development and verification capabilities of mobilgene, Hyundai AutoEver's automotive software (SW) division. Hyundai AutoEver currently automatically runs 700,000 to 800,000 test cases for approximately 70 software modules every day over four to five hours. From the end of this year through next year, it plans to expand the scope of automated verification to actual customer controllers.
Lee said, "Hyundai Motor Group has shifted toward using validated external technologies, such as those from NVIDIA Corporation, to bring forward the start of mass production while developing its own technologies in parallel. Hyundai AutoEver is expected to focus on external operating systems and AI, as well as maps and vehicle data, rather than developing every technology independently."
He added, "The scope Hyundai AutoEver actually handles and its level of readiness for mass production are more specific than the market expects. It is worth watching for a medium- to long-term expansion in the scope of orders per vehicle. Going forward, revenue and profitability are expected to be key variables for earnings and valuation."

[email protected] Lim Sang-hyeok Reporter