[Click eStock] "Strong Results and Subsidiaries on the Rise" HD Hyundai Target Price Raised

Heungkuk Securities has raised its target price for HD Hyundai from 3 million won to 3.3 million won.

According to Heungkuk Securities on September 9, the upward revision of the target price reflects the strong performance across HD Hyundai’s subsidiaries—spanning shipbuilding, refining & chemicals, electrical equipment, construction equipment, and ship services—as well as the rising value of these subsidiaries. Considering the previous day's closing price of 246,500 won, Heungkuk Securities sees nearly 34% potential upside. Park Jongryul, a researcher at Heungkuk Securities, explained, "We revised the target price upward to reflect strong performance and the increased value of subsidiary shares."

HD Hyundai is projected to deliver solid results in the third quarter on a consolidated basis, posting sales of 20.9 trillion won and operating profit of 3.2 trillion won, continuing the trend of robust performance from the previous quarter. This would represent increases of 14.7% and 88.6% year-on-year, respectively. Park anticipated, "HD Korea Shipbuilding & Offshore Engineering and HD Hyundai Oilbank will lead consolidated operating profit growth, and most subsidiaries in the electrical equipment, construction machinery, and ship services businesses will continue to deliver solid results." HD Korea Shipbuilding & Offshore Engineering is benefiting from a rising proportion of high-priced, high-margin projects and improved productivity; HD Hyundai Oilbank is seeing gains from strong international oil prices and improved refining margins due to geopolitical risks; and HD Hyundai Site Solution is supported by increased volume and an improved product mix.

For the full year, HD Hyundai is also expected to achieve solid consolidated performance. Heungkuk Securities maintained its previous estimates for annual sales at 86.1 trillion won and operating profit at 13.8 trillion won. Park commented, "With a diversified business portfolio—including shipbuilding, electrical equipment, construction machinery, and ship services—and solid global demand, the company is expected to sustain its strong earnings momentum." He also forecast that the positive trend would continue for subsidiaries such as HD Korea Shipbuilding & Offshore Engineering, HD Hyundai Electric, HD Hyundai Site Solution, and Hyundai Marine Solution.

Park added, "Despite the recent rebound in the stock price, the discount to net asset value (NAV) remains at 58.0%, while the price-to-earnings (P/E) and price-to-book (P/B) ratios, based on expected earnings for the next 12 months, are still low at 5.9 times and 1.4 times, respectively." He also suggested, "It is time for the company to take more active measures to enhance shareholder returns, such as cancelling treasury shares."

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