On the 29th, NH Investment & Securities maintained a 'buy' rating on Hyundai Motor and lowered its target price to 300,000 won, citing the prolonged sluggish business in China, despite the fact that Hyundai Motor is expected to have the highest operating profit in 2022.
"We reflected the prolonged sluggish Chinese business by making it a reality in our future performance and slightly lowered our earnings forecast for 2021 to reflect a drop in global utilization rate due to semiconductor supply and demand issues," NH Investment & Securities said.
"However, we believe that performance momentum will be strengthened again in 2022 thanks to normalizing production and strengthening retail sales momentum.".
"Although there are short-term supply uncertainties, the long-term ROE improvement cycle is in progress due to the accumulation of successful new car effects," NH Investment & Securities said. "Considering the mid- to long-term expectations for the successful transformation of the future business structure, such as the successful introduction of the electric vehicle-only platform (E-GMP) and the strategy to expand the mid- to long-term hydrogen business, the increase in the stock price is sufficient at the current stock price level.".
"The third-quarter operating profit is estimated to turn into a surplus compared to the same period last year and fall below the consensus of 1.6418 trillion won," NH Investment & Securities said. "The drop in global utilization rate due to disrupted supply and demand of semiconductors and the rise in the price of raw material input are negative factors.".
"We believe that price factors (improvement in product mix due to priority production of high value-added vehicles, a drop in sales incentives due to lack of inventory, and a rise in the won-dollar exchange rate) will offset some of the above performance concerns," NH Investment & Securities said.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
