Electrification Boom: Hyundai Mobis Sees Bright Future Ahead with 100-Year-Old Partner

Hyundai Mobis Expected to Show Stable Profitability in After-Sales Service Sector

IBK Investment & Securities has rated Hyundai Mobis, predicting stable profitability in the after-sales service (A/S) sector and sales growth in the electrification sector in the future. The target stock price has been set at 300,000, with a ‘Buy’ investment opinion.

This year, Hyundai Mobis is expected to show sales of KRW 57.614 trillion, down 2.8% from the previous year, and operating profit of KRW 2.556 trillion, up 11.3%. Sales by sector are expected to be KRW 45.781 trillion for modules and components (-5.4% over the previous year) and KRW 11.833 trillion for A/S (+8.7%), respectively.

Stable Sales and Profits Related to Electrification and After-Sales Service

According to Lee Hyun-wook, a researcher at IBK Investment and Securities, “The investment points are stable sales and profits related to electrification, non-captive orders, and after-sales service.”

Researcher Lee explained that while electrification-related sales are expected to be negative in the short term due to the decline in global electric vehicle demand, the ban on internal combustion engine vehicles and the megatrend for carbon neutrality are expected to drive sales growth related to electrification in the future.

Module and Component Sales to Show Negative Growth

However, researcher Lee noted that module and component sales will show negative growth compared to the previous year. This is due to the conversion of finished cars in the electrification sector from direct purchases at the company level, which affects the accounting process.

A/S Division to Remain Cash Cow

The A/S division is expected to remain the company’s cash cow due to the growing global operations of Hyundai Motors and Kia. The operating profit margin is expected to be 24.7%.