[Click eStock] Daol Lowers Hyundai WIA Target Price...Maintains 'Buy' Rating

Daol Investment & Securities lowered its target price for Hyundai WIA to 77,000 won. However, it maintained a "Buy" investment rating, stating that among the Hyundai Motor Group's automobile subsidiaries, Hyundai WIA remains the most undervalued.

According to Daol Investment & Securities on September 29, the new target price is based on the expected 2027 earnings per share (EPS), applying a price-to-earnings (P/E) ratio of 10.5 times. This valuation applies the top-tier multiple for traditional auto parts manufacturers, not for the robotics option segment. The previous day, Hyundai WIA shares closed at 53,800 won. In spite of the target price cut, the company believes there is still over 40% additional upside potential.

Woo Jiwoong, an analyst at Daol Investment & Securities who authored the report, stated, "By 2027, growth in sales of hybrid electric vehicle (HEV) dedicated engines and revenue from the thermal management division will emerge as key drivers."

Operating profit for the third quarter is expected to reach 49.2 billion won, similar to the previous quarter. Despite a full-scale strike at finished car makers, factors such as the expansion of overseas CVJ (constant velocity joint) production and the start of HEV engine production are analyzed as mitigating elements.

Analyst Woo added, "In terms of stock price, shares are trading at 0.4 times price-to-book (P/B) ratio, making Hyundai WIA the most undervalued among Hyundai Motor Group automotive subsidiaries. As the profitability improvement from the HEV mix is proven, the company’s strategic importance will be reflected in its rising valuation."

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