IBK Securities said on the 24th that Hyundai Motor needs to be re-rated as a Robotics platform. It maintained a Buy rating and raised its target price to 650,000 won. Hyundai Motor closed the previous session at 485,000 won.
Lee Hyun-uk, an analyst at IBK Securities, said, "Until now, the market has viewed Hyundai Motor as a high-growth original equipment manufacturer (OEM) but an undervalued auto company," and added, "Going forward, it is being discussed from a new perspective as an artificial intelligence (AI)-based industrial platform encompassing Autonomous Driving, smart factories, and Robotics."
IBK Securities forecast Hyundai Motor's revenue this year at 195.735 trillion won and operating profit at 12.525 trillion won. That would be up 5.1% and 9.2%, respectively, from a year earlier. By business segment, it estimated revenue at 152.87 trillion won for autos, 31.228 trillion won for finance, and 11.638 trillion won for other.
The analyst said, "The market no longer views Korea's auto industry as merely a traditional automaking sector," adding, "Whereas it used to be explained by traditional variables like sales volume and economic cycles, recently the ability to scale with data accumulation, software, and artificial intelligence (AI) is emerging as the factor that determines long-term competitiveness."
It also analyzed that the auto industry is expanding into the Robotics field. The analyst said, "Software-defined vehicles (SDV), Autonomous Driving, smart factories, and Robotics are not separate themes but part of a single continuum of change," and explained, "We should view the auto sector not as a cyclical manufacturing industry but as an early commercialization platform for physical AI."
The analyst added, "We should interpret the structure as one in which long-term option value is added on top of the earnings generated by existing car sales."