[Click e-Stock] "Hyundai Mobis Cuts Target Price from KRW 680,000 to KRW 580,000... Maintains 'Buy' Rating"

Hana Securities lowered its target price for Hyundai Mobis from KRW 680,000 to KRW 580,000, citing lower earnings estimates and a decline in the value of its stakes in affiliates. It maintained its "Buy" rating.

Hana Securities announced the move on October 8 in a company analysis report on Hyundai Mobis.

Hyundai Mobis is estimated to post revenue of KRW 15.3 trillion and operating profit of KRW 896.4 billion in the third quarter. Both figures are expected to fall slightly short of the previous forecast. The operating margin for the same period is projected at 5.9%, up 0.7 percentage points year over year but down 0.1 percentage points quarter over quarter.

"Third-quarter earnings are expected to fall slightly short of expectations due to production disruptions at customers," said analyst Song Seonjae. However, he maintained his Buy rating, saying, "The company's earnings resilience will come to the fore because it has after-sales service as a highly profitable cash cow." The new target price of KRW 580,000 still implies about 55% upside from the previous day's closing price of KRW 373,500.

He also highlighted the decision to spin off the lamp business division. Hyundai Mobis previously decided to spin off the division effective April 1, 2027. The shareholders of record will be determined as of October 15, 2026, and shareholders opposed to the spin-off can exercise their appraisal rights from November 24 to December 14. The appraisal price is KRW 408,394 per share.

"The lamp business division is estimated to generate KRW 2.4 trillion in revenue, with a low-single-digit profit margin," Song said. "The spin-off is a preliminary step with a potential sale in mind for the lamp business, which is a non-core, capital-intensive business. The sale process is scheduled to proceed in 2027 with OP Mobility, the preferred negotiating partner."

"We expect the proceeds from the sale to contribute to improving corporate value over the medium to long term by funding investment in future businesses such as automotive electronics and robotics," he said. "Related catalysts are expected to be reflected in the share price as the process moves forward, including the delivery of actuator prototypes, factory construction, the selection of additional products, and expansion of the customer base."

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