HD Hyundai Electric recorded its largest quarterly revenue in the first quarter (January-March), but securities firms have differing outlooks due to concerns about Peak Out and the impact of tariffs.
HD Hyundai Electric announced on the 22nd that its consolidated revenue for the first quarter of this year was 1.14 trillion won. This is a 26.7% increase compared to the same period last year, and it marks the first time quarterly revenue has exceeded 1 trillion won. Operating profit was recorded at 218.2 billion won, an increase of 69.4% from the same period last year.
Despite the record-high quarterly revenue, securities firms have lowered their target stock prices. After the first quarter results announcement, the stock price fell 9.75%, raising concerns that the profitability has peaked.
Shinhan Investment & Securities evaluated that the stock price of HD Hyundai Electric is on a short-term test due to concerns about Peak Out. They also lowered their target stock price from 480,000 won to 420,000 won.
Han Young-soo, a researcher at Samsung Securities, said, "The first quarter results exceeded market expectations, but the improvement in profitability was insufficient compared to the rising share of North American revenue compared to the fourth quarter of last year (September-December), leading to concerns about profitability peaking." However, he noted that the concerns about declining profitability are excessive and maintained a 'buy' investment opinion, adjusting the target stock price from 502,000 won to 474,000 won.
On this day, NH Investment & Securities (500,000 won → 440,000 won) and Kiwoom Securities (480,000 won → 400,000 won) also lowered their target stock prices.
In contrast, Daishin Securities raised its target stock price from 375,000 won to 400,000 won. Heo Min-ho, a researcher at Daishin Securities, noted, "The sharp drop in the stock price after the earnings announcement is excessive," adding, "If we succeed in reducing tariffs or can fully pass on the tariff burden to customers, we can achieve additional results."
Yu Jae-seon, a researcher at Hana Financial Investment, stated, "While there are performance fluctuation factors in terms of costs such as tariffs, it is a supplier-dominant market, so price pass-through can be smoothly achieved," and added, "Although new orders this quarter decreased compared to the previous year, it is difficult to consider this a signal that the trend has changed." He maintained the existing target stock price of 500,000 won.