[Click eStock] "HD Hyundai's Performance Drives NAV Growth...Target Price Raised"

Mirae Asset Securities Raises Target Price for HD Hyundai to 280,000 Won

On August 3, Mirae Asset Securities announced that it expects the net asset value (NAV) of HD Hyundai to increase, raising its target price from 245,000 won to 280,000 won and maintaining its "Buy" investment rating.

HD Hyundai's consolidated operating profit for the second quarter reached 4.1246 trillion won, surpassing both securities firms’ estimates of 2.476 trillion won and the market consensus of 2.0915 trillion won by 58.7%.

This performance surprise was primarily driven by a turnaround in operating profit by HD Hyundai Oilbank, which achieved 1.8241 trillion won in operating profit. HD Korea Shipbuilding & Offshore Engineering (1.6451 trillion won) and HD Hyundai Electric (287.0 billion won) also showed high growth, while HD Hyundai Site Solution (272.0 billion won) delivered a strong performance as well.

The results of unlisted affiliates were also notable. Analyst Ryu Je-hyun at Mirae Asset Securities stated, "HD Hyundai Oilbank's operating profit included an inventory-related gain of 500.0 billion won, as disclosed by the company during the conference call. Even excluding this, operating profit exceeded Mirae Asset Securities' estimate by 39%." He added, "We revised our assumptions regarding unit margin and upwardly adjusted our operating profit projections."

Ryu further noted, "HD Hyundai Robotics' shift to profitability is also significant. As sales increase, economies of scale are starting to emerge, and with rising revenue from automotive and industrial projects, the company's profit structure is improving."

Based on this analysis, Mirae Asset Securities selected HD Hyundai as its top pick in the holding company sector. Analyst Ryu explained, "Unlisted affiliates contributed about 40% to the NAV increase, resulting in the total NAV rising from 28.73 trillion won to 33.04 trillion won compared to the previous estimate. Although dividends from Hyundai Oilbank are limited due to petrochemical restructuring, there is potential for improvement after restructuring. The NAV projection for HD Hyundai Robotics was also slightly raised due to its shift to profitability."

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