[Click e-Stock] 'Hyundai Gongup' Expected to Offer Dividend Yield in the 6% Range

Shinyoung Securities: "Potential for Recovery in Hyundai Gongup's Domestic Sales in the Second Half"

On September 1, Shinyoung Securities maintained its "Buy" investment opinion and a target share price of 7,000 won for Hyundai Gongup, stating that the new U.S. subsidiary is driving earnings growth this year and that even if the company maintains last year's dividend level, investors can expect a dividend yield in the 6% range.

Hyunseok Kang, a researcher at Shinyoung Securities, noted, "Hyundai Gongup's consolidated sales in the first half of this year fell 3% year-on-year. However, despite decreasing sales in Korea, revenue from the new U.S. subsidiary—which began full-scale operation last year—increased by 75%, reaching the annual 2025 level of 18.6 billion won in just the first half alone."

Researcher Kang added, "The growth trend of the U.S. subsidiary is expected to continue in the second half of the year, driven by the launch of the Telluride Hybrid (HEV). This localization in the U.S. also contributed to alleviating logistics costs, which helped achieve an operating margin of 6.6% in the first half."

He further analyzed, "Although operating margins typically decline in the second half due to higher labor costs, domestic sales—which had been constrained in the first half—could recover from the fourth quarter onward, following the launch of new cars in Korea."

He explained, "Sales in Korea declined by 8% in the first half of this year, due to production disruptions of Hyundai vehicles caused by the Anjeong Gongup fire, as well as weak Genesis domestic production. However, beginning in the fourth quarter with the launch of the new Tucson and the new GV90, increased volume from an expanded HEV lineup for Genesis and the recovery from previous Hyundai production disruptions are expected to drive a rebound in sales in Korea."

Researcher Kang added, "As of the end of the second quarter, the company's net cash stood at 13.2 billion won and its debt dependence ratio was 6%, demonstrating a stable financial structure. With the company maintaining its earnings growth in the first half, there is ample capacity to sustain this year's dividends. Assuming the dividend per share (DPS) remains at 300 won, the expected dividend yield currently stands at 6.2%," he concluded.

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