Korea Investment & Securities Co. on the 30th maintained a "neutral (HOLD)" rating on HL Mando, saying the valuation burden is heavy relative to earnings. The previous trading day's closing price was 57,900 won.
HL Mando disclosed that in the first quarter of this year, operating profit rose 18.2% on-year to 93.6 billion won, while revenue increased 1.8% to 2.312 trillion won.
Kim Jang-ho, an analyst at Korea Investment & Securities Co., said, "On the surface, the results meet market expectations, but excluding roughly 10 billion won in one-off gains, underlying operating profit falls about 8% short of consensus." The one-off gains are understood to be customer compensation related to a reduction in volumes for previously booked electronic parking brakes (MoC).
However, he said, "Despite a sharp drop in industrial demand in China, it is positive that China revenue increased 4% on-year thanks to higher sales to a leading North American electric vehicle (EV) maker and to Nio."
In the second quarter, cost pressures are expected to increase. Kim said, "Due to higher memory semiconductor prices in the first quarter, cost increases reached 6.6 billion won," adding, "With a high likelihood of further increases in the second quarter and with the one-off gains seen in the first quarter unlikely to recur, the risk of net cost expansion rises."
He said the stock is overvalued relative to earnings. "Compared with the pace of earnings improvement, expectations for supplying robot actuators are excessively priced in," he said. "Given that robot actuator components are not expected to take shape until 2027–2028, the 2026 PER is currently around 16.8 times, indicating a heavy valuation burden."