Kiwoom Securities downgraded its investment opinion on Hyundai Motor from "buy" to "outperform" on the 24th. The target price was lowered from 295,000 won to 245,000 won. This is due to concerns about increasing competition as the global automobile market is expected to be stagnant this year.
Last year, Hyundai Motor achieved a consolidated revenue growth rate of 7.7% and an operating profit margin of 8.1%, surpassing previously set targets (revenue growth rate of 4.5% and operating profit margin of 8-9%). Shin Yun-cheol, a Kiwoom Securities research institute analyst, noted, "Based on strong performance in the first half of last year, we kept our promise to investors," adding that "the achievement rate of the annual wholesale sales target of 4.24 million units was 97.7%, and the profit and loss deterioration due to exceeding sales guarantees in the second half of last year was disappointing."
Hyundai Motor suggested a wholesale sales growth rate target of 0.8% and a consolidated revenue growth rate of 3-4% for this year. The research institute analyst stated that this level effectively represents a profit reduction guidance considering the possibility of rapid changes in U.S. automotive policies such as the Inflation Reduction Act (IRA) and tariffs, the rise of competitors in China and India, and exchange rate volatility.
He remarked, "The electric vehicle production plant being built by Hyundai Motor Group in Georgia is set to begin formal operations this year, and if we cannot expect additional revenue growth from new vehicle cycles like the new Palisade (LX3) and Ioniq 9, it will be difficult to fully respond to external factors."
The research institute analyst also said, "If aggressive guidance is presented during the performance announcements of global competitors during the Lunar New Year holiday, Hyundai Motor's investment attractiveness may diminish in the short term." He continued, "After expressing a willingness to strengthen the purchase of preferred shares to normalize the gap between common and preferred shares last year, the gap has significantly narrowed, thus the investment attractiveness of preferred shares has diluted."