LS Securities said on the 27th that Hyundai Mobis' electrification institutional sector performance will improve from the second half of this year as HMGMA utilization rises and European electric vehicle sales increase. It kept its "buy" rating and its target price of 5.8 million won unchanged. The previous session's closing price was 422,500 won.
Hyundai Mobis posted revenue of 15.6 trillion won and operating profit of 802.6 billion won in the first quarter of this year.
Lee Byung-geun, an analyst at LS Securities, said, "The parts and module division saw revenue rise 4.9% from a year earlier despite lower complete vehicle sales, as Non-Captive sales increased and parts manufacturing sales centered on electronic components expanded," but noted, "Initial operating expense burdens arose at new electrification production lines in Europe, including Spain, and losses widened as utilization at the U.S. plant fell."
The analyst added, "Memory volumes are secured under long-term contracts, so the risk of output cuts due to semiconductor shortages is limited," and "from the second half, HMGMA utilization will rise and European EV sales will increase."
LS Securities assessed that demand remained strong, with sales in the Americas up 5% year over year and sales in Europe up 15%, and that the AS institutional sector's revenue expanded 5.4% on the back of a stronger dollar.
It projected that profitability will continue to improve through price hikes as the 15% tariff is fully reflected starting in the second quarter of this year.
The analyst said, "The current share price is undervalued even among legacy parts makers," adding, "the annual earnings recovery remains intact, and profit improvement is expected to be weak in the first half and strong in the second."
He went on, "Actuator development will be completed by year-end," adding, "a rapid rerating is likely as it is reappraised as a robot parts corporations with firm order visibility."