"Hyundai Mobis' Shift to Robotics Parts Company Viewed Positively… Target Price Raised" [Click e-Stock]

LS Securities Sets Hyundai Mobis Target Price at KRW 870,000

On May 28, LS Securities issued a positive assessment of Hyundai Mobis’ transformation into a robotics parts company, raising its target share price from KRW 5.8 million to KRW 8.7 million while maintaining its “Buy” investment rating.

Hyundai Mobis posted first-quarter sales of KRW 1.5561 trillion and operating profit of KRW 803 billion. Sales in the parts and module division amounted to KRW 1.2042 trillion, while the after-sales (AS) division recorded KRW 3.519 trillion.

Profitability by division is expected to improve further. The analyst commented, “From the second quarter, a 15% tariff will be fully reflected in the AS division, and profitability continues to improve year-on-year due to tariff relaxation and price increases. Meanwhile, despite a decrease in finished vehicle sales, the parts and module division is expected to see growth in sales to external (non-captive) customers and an expansion of electronics-focused parts manufacturing sales.”

Due to rising memory semiconductor prices, annual costs are projected to increase to KRW 200 billion. However, with memory volume secured through a long-term contract with KB Securities, the potential reduction in production due to a semiconductor supply shortage is expected to be limited. KB Securities forecasts Hyundai Mobis’ full-year sales and operating profit at KRW 63.756 trillion and KRW 3.358 trillion, respectively.

The momentum behind the robotics parts business was also evaluated positively. Hyundai Mobis plans to secure a local U.S. actuator plant with an annual capacity of 350,000 units. This initial capacity of 350,000 units (CAPA) is expected to cover the volume for the first one to two years—approximately 6,000 units annually—before ramping up to a full-scale 30,000-unit system.

KB Securities estimated that the sales effect of the 350,000-unit actuator plant would be about KRW 350 billion, and projected that actuator sales would exceed KRW 1.5 trillion when mass production of 30,000 Atlas units is achieved.

Byungkeun Lee, an analyst at LS Securities, stated, “The shift from a legacy parts company to a robotics parts company will serve as a strong catalyst for an upward revision of the price-to-earnings ratio (PER) for Hyundai Mobis.”

This content was produced with the assistance of AI translation services.