“APR cuts its target price, but ‘far from fundamental damage’ ... ‘Fears of SpaceX competing with SK Telecom are overblown’ [Stocktopia]

[Financial News] This morning, October 13, we bring you a roundup of reports from major securities firms.
APR is expected to see Q3 operating profit fall short of market expectations due to cost pressures from the stronger won and expanding online sales in Europe, but analysts say this is far from damaging the company’s underlying fundamentals.
Hyundai Mobis has become somewhat less attractive to investors due to the stronger won and a competitor’s consideration of entering the after-sales service (A/S) business. Analysts say a re-rating of its shares will require, among other things, more mass-production orders for robotics parts. SK Telecom is expected to see Q3 operating profit return to normal levels, while concerns about direct competition with SpaceX are considered overblown.
◆ APR (278470)— SK Securities / Analyst Hyung Kwon-hoon
- Target price: 480,000 won (cut 14.3%, from 560,000 won) ᅵ Previous close: 352,000 won
- Investment rating: Buy (maintained)
SK Securities estimates that APR, which operates the cosmetics brand Medicube, will post Q3 operating profit 9% below market expectations. It cut its target price to 480,000 won, reflecting lower valuations for comparable cosmetics-brand companies and a slight reduction in its earnings estimates.
Analyst Hyung Kwon-hoon said, “The downward pressure on profitability that the market has been concerned about recently stems from the stronger won and the rapid growth of online sales in Europe, which are not yet very profitable,” but said this was “far from damaging the company’s fundamentals.”
The explanation is that the stronger won is an external factor unrelated to the company’s underlying strength, while the surge in online sales in Europe is an investment to expand into the much larger offline market there.
Analyst Hyung expects the costs of expansion to “ease as the online business in Europe stabilizes and the share of high-margin offline sales increases.” He said a similar pattern is likely to emerge in Europe to the one seen in the United States in 2024, when profitability temporarily declined as the online business was rapidly scaled up, then recovered.
◆ Hyundai Mobis (012330)— Kiwoom Securities / Analyst Shin Yun-cheol
- Target price: 640,000 won (cut 14.7%, from 750,000 won) ᅵ Previous close: 354,500 won
- Investment rating: Buy (maintained)
Kiwoom Securities lowered its target price for Hyundai Mobis to 640,000 won, saying it would be difficult for the company’s valuation to recover to its peak from the first half of this year. It expects Q3 operating profit to come in slightly below market expectations. Strikes at Hyundai Motor and Kia are expected to reduce module assembly revenue, while the stronger won is likely to lower margins in the high-profit after-sales service parts business.
On competitor Hanon Systems’ consideration of launching a new after-sales service business by year-end, analyst Shin Yun-cheol said, “From an investor’s perspective, this means there will be more investment options in a high-margin business that Hyundai Mobis has been the only domestic automotive electronics supplier to operate.”
The explanation is that while the new business is unlikely to directly encroach on Hyundai Mobis’s business in the short term, investors should bear in mind the possibility that investment demand will gradually become more dispersed.
On the robotics business, the analyst expects deliveries of sample joint actuators to Boston Dynamics, the robotics affiliate of Hyundai Motor Group, to begin by year-end, but judged that “the start of sample deliveries alone is unlikely to normalize the share price.” The analysis says a re-rating would require confirmation of more mass-production orders for robotics parts other than actuators, or large orders from customers outside the group.
Regarding the sale of the lamp business division, the analyst judged that employee compensation payments are likely to be covered by the sale proceeds, meaning the actual cash inflow will fall short of the sale price reported by the market.
※ Actuator: A drive component that converts electrical signals into physical movement and serves as a robot’s joint. It is considered the component that accounts for the largest share of the manufacturing cost of humanoid robots.
◆ SK Telecom (017670)— Daishin Securities / Analyst Kim Hoe-jae
- Target price: 110,000 won (maintained) ᅵ Previous close: 79,700 won
- Investment rating: Buy (maintained)
Daishin Securities maintained its target price of 110,000 won, expecting SK Telecom’s Q3 operating profit to return to normal levels. It estimates operating profit at about 530 billion won, up 983% from the same period a year earlier. The figure reflects a base effect, as profit fell sharply in Q3 last year.
Concerns have emerged that SpaceX could compete directly with telecom carriers after securing 14 MHz of spectrum in the 800-megahertz (MHz) band in the United States. Analyst Kim Hoe-jae described the concern that satellites could replace telecom carriers as “excessive alarm.”
South Korean telecom carriers each use 200–255 MHz of spectrum and have invested hundreds of trillions of won over the past 30 years to build nationwide networks. Analyst Kim said that, given the difference in spectrum capacity and investment scale, SpaceX is unlikely to enter the mobile business directly.
The interpretation is that SpaceX is instead acknowledging the limitations of satellites and signaling its intention to work with telecom carriers. The analyst cited artificial intelligence data center (AIDC) services as a medium- to long-term growth driver, forecasting that related revenue will reach 1.5 trillion won in 2030, growing at an average annual rate of 31%.※ Spectrum bandwidthThe range of frequencies used for communications; the wider it is, the greater the volume of data that can be transmitted simultaneously. It is considered a factor that determines the speed of communications services and the number of subscribers they can accommodate.

[email protected] Seong Min-seo Reporter