Automotive Electronics and Robotics Raise Expectations, Yet Target Price Cut 19%—Why Hyundai Mobis?

[Financial News] Samsung Securities lowered Hyundai Mobis’s target price by 18.8%, from 800,000 won to 650,000 won, reflecting the stronger Korean won and concerns about slower sales at Hyundai Motor Company. However, it maintained its “Buy” rating, citing the medium- to long-term growth potential of the automotive electronics systems and robotics businesses.
Lim Eun-young, an analyst at Samsung Securities, said on the 17th, "Sales are expected to decline as demand for internal-combustion-engine vehicles slows amid the impact of a strike in the second half and high oil prices caused by the prolonged war, which will affect Hyundai Motor Company, a major customer."
Accordingly, Samsung Securities cut its forecast for Hyundai Mobis’s earnings per share (EPS) this year by 11.7%, from 46,218 won to 40,814 won. Its forecast for next year was lowered by 20.5%, from 51,732 won to 41,127 won.
The recent sharp appreciation of the Korean won was another factor behind the lower earnings forecasts. However, Hyundai Mobis was analyzed as being relatively less sensitive to exchange-rate movements within Hyundai Motor Group. The automotive electronics division imports semiconductors in U.S. dollars, while the module division is considered neutral to exchange-rate fluctuations. In the after-sales service division, operating profit is estimated to fluctuate by 1.7% when the exchange rate moves by 1%.
Samsung Securities estimates Hyundai Mobis’s net dollar exposure at $6.459 billion. A 1% change in the exchange rate is estimated to result in a 1.7% change in operating profit. That is about half the level of Hyundai Motor Company at 3.3% and Kia Corporation at 3.4%.
Hyundai Mobis’s revenue this year is projected to rise 2.8% year on year to 62.855 trillion won, while operating profit is expected to increase 12.3% to 3.769 trillion won.
Samsung Securities identified automotive electronics systems as a medium- to long-term growth driver. Hyundai Mobis’s automotive electronics systems revenue has grown by more than 10% annually since 2024, reaching approximately 5.2 trillion won in the first half of this year, up 12% from the same period a year earlier. Its share of module-division revenue also expanded to 21%. As Hyundai Motor Company and Kia Corporation continue shifting toward software-defined vehicles (SDVs), Samsung Securities expects greater adoption of Hyundai Mobis’s internally designed system-on-chip (SoC) and automotive electronics systems.
The robotics business was also presented as a new growth engine. Hyundai Mobis plans to supply not only 31 actuators but also the head controller and grippers for Boston Dynamics’ humanoid robot Atlas. Samsung Securities expects Hyundai Mobis to account for approximately 60% of Atlas’s hardware costs and analyzed that the robot actuator business could turn profitable before 2030.
Lim said, "This is a period in which concerns over pressure to reduce component prices due to slowing earnings at Hyundai Motor Company and Kia Corporation coexist with expectations for revenue growth and profitability from automotive components. It is important whether the profitability of core components improves in the second half as customers settle the costs."
[email protected] Bae Han-geul Reporter