[Click e-Stock] "Hyundai Mobis: Solid Earnings and Robotics Expectations Drive Target Price Upgrade"

Kyobo: "Results Expected to Improve Despite Cost Pressures"

Kyobo Securities raised its target price for Hyundai Mobis on July 27, increasing it from 550,000 won to 700,000 won, while maintaining its 'Buy' investment rating.

Gwangsik Kim, an analyst at Kyobo Securities, stated that day, "We have revised our earnings estimates for 2026-2027 upward to reflect the impact of a strong won-dollar exchange rate, improvements in A/S profitability, and a higher mix of electric vehicle components. Several upcoming events, including the announcement of U.S. robotics policies, mean there is sufficient potential for the robotics business value to be highlighted." He further added, "Reflecting both the upgraded earnings outlook and the new business value of robotics, we have raised our target price and continue to recommend Hyundai Mobis as a top pick within the automotive parts sector."

In the second quarter of this year, Hyundai Mobis recorded sales of 16.3 trillion won, up 2.4% from the same period last year, and operating profit of 975.2 billion won, a 12.1% increase. Both figures exceeded market expectations, which were sales of 16.6 trillion won and operating profit of 907.5 billion won. Analyst Kim commented, "Despite semiconductor cost pressures and a fire at the India plant, the company reported solid results."

In particular, the A/S division posted sales of 3.4 trillion won and operating profit of 953.4 billion won, resulting in an operating margin of 27.8% and boosting overall company results. Kim added, "Due to duty rebates and lower auto parts tariffs, tariff burdens dropped from 59.2 billion won in the previous quarter to 19 billion won, while the effects of price hikes and a strong exchange rate supported continued high profitability."

Looking ahead to the second half of the year, Kim also forecast further improvement in results despite continued cost pressures. He observed, "Semiconductor and logistics costs will likely remain a burden of over 90 billion won per quarter in the second half," but continued, "Estimated quarterly tariff savings of about 30 billion won, incremental A/S profits supported by a strong exchange rate, the expansion of models equipped with Pleos, and increased utilization rates at electrification lines in Europe will likely offset these pressures through improved manufacturing mix."

He also noted, "Operating losses related to the India fire are expected to fall from about 50 billion won in the third quarter to about 20 billion won in the fourth quarter," and added, "We expect incremental improvements in second-half results moving forward."

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