IBK Securities said it is time for Hyundai Motor's robot business value to come into full focus, maintained its buy rating, and raised its target price to 770,000 won from 650,000 won. Citing Hyundai Motor Group's presentation of captive (in-house) demand for 25,000 units of the Humanoid Robot "Atlas" as the basis, it gave a high assessment of the growth potential of the Robotics business. Hyundai Motor's closing price on the previous trading day was 639,000 won.
Lee Hyun-uk, an IBK Securities researcher, said, "Hyundai Motor's investment points are earnings defensibility centered on hybrid vehicles (HEV), flexibility in the transition to electrification, expanded shareholder returns, and the Robotics option value through mass production of Boston Dynamics and Atlas."
IBK Securities noted that Hyundai Motor Group is fostering Boston Dynamics not as a simple technology asset, but as an industrial platform that combines manufacturing, parts, logistics, IT, and finance capabilities.
The researcher said, "Hyundai Motor's strength is that it already owns sites where robots can actually be used," and added, "The biggest problem in commercializing humanoids is where to sell them, but Hyundai Motor Group can use automobile plants, logistics, parts manufacturing, and its global production network as its own testbed, so it presented captive demand for 25,000 Atlas units."
It also positively assessed that the Robot Metaplant Application Center (RMAC) within Hyundai Motor Group Metaplant America (HMGMA) is scheduled to start operations next summer. It projected that a robot development system linking data collection and learning, verification, simulation, and actuator manufacturing will be established there.
IBK Securities forecast Hyundai Motor's revenue next year at 195.189 trillion won and operating profit at 12.01 trillion won. Those figures are up 4.8% and 4.7%, respectively, from a year earlier. By segment, it projected revenue of 157.018 trillion won for automobiles, 35.111 trillion won for finance, and 10.898 trillion won for other segments.
It also saw the core business value of Hyundai Motor as potentially being re-rated. IBK Securities projected that Hyundai Motor will continue stable results during the transition to electrification, backed by profitability centered on hybrids. In addition, it expected expanded shareholder returns to support the lower end of the valuation range.
The target price hike reflects the value of the robot business. IBK Securities valued the core business at 133 trillion won based on 11.5 trillion won in 2027 net profit attributable to controlling shareholders. It then added about 39 trillion won in robot business value by applying a 13x price-to-sales ratio (PSR) to Boston Dynamics' projected 2030 revenue of 10.9 trillion won and reflecting Hyundai Motor's equity value.