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Entered2024.05.04 08:33 Modified2024.05.04 08:45
Operating profit fell 93% compared to the previous year… Recovering EV growth is also ‘difficult’
HD Hyundai Heavy Industries, ‘pillar of fire’ due to expectations of ‘exceptional’ growth despite earnings shock
Photo = Getty Image Bank Ecopro BM fell sharply even after reporting a first quarter performance that was significantly higher than the consensus (average estimate of securities companies). On the other hand, HD Hyundai Heavy Industries recorded an operating profit that was less than 30% of expectations, but has risen more than 10% since entering April. Stock price is at odds with performance Why does this trend occur?
Inside and outside the market, growth potential is evaluated as the difference between good and bad in the stock price. Although Ecopro BM posted a performance that was a significant step back compared to a year ago, HD Hyundai Heavy Industries turned a surplus. According to financial information company FnGuide, of the 254 stocks for which a consensus has been formed based on estimates from three or more securities firms, a total of 100 stocks have announced their first quarter earnings on May 2. Among them, there were 41 ‘earnings surprise’ stocks whose operating profit exceeded the consensus calculated on April 1 by more than 10%, and 38 ‘earnings shock’ stocks whose profit active fell more than 10% lower.
Overall, the stock price trend this earnings season showed the same direction as performance. Among the earnings surprise stocks, there were only eight whose closing prices on May 2 fell by more than 5% compared to the closing prices on April 1. Among the earnings shock stocks, there are five whose stock prices rose by more than 5%. During this period, KOSPI fell by 2.34%. First quarter operating profit was KRW 6.684 billion, exceeding the consensus (KRW 1.688 billion) by 295.97%. Even before the earnings announcement, the consensus had shifted to a deficit. Although performance exceeded expectations by a significant margin, the stock price performance was sluggish. On the 3rd, immediately after the earnings announcement, the KOSDAQ index fell by 3%. This is due to a large amount of negative growth. Ecopro BM’s first quarter operating profit fell 93.8% compared to a year ago.
The sluggish performance is expected to continue into the second quarter. In a conference call held on the 3rd, EcoPro BM’s parent company, EcoPro, said, “The burden of fixed costs has increased due to a decrease in volume due to a slowdown in demand in the upstream market (electric vehicle market),” and “Performance will continue to be sluggish until the second quarter.”
Concerns about slowing growth are already weighing on stock prices. Ecopro BM stock price decreased 14.96% since April until the 2nd of this month. This is because sales of Tesla vehicles, which are considered the barometer of the electric vehicle industry, are slow. HD Hyundai’s operating profit in the first quarter also exceeded the consensus by 38.58%, but its stock price fell by 10.57% from the beginning of April to the 2nd of this month. This is an example of a stock price falling due to various events. It plunged in mid-April due to the IPO of HD Hyundai Marine Solutions, a ship maintenance and repair subsidiary. Later, at the end of April, when military tensions increased in the Middle East, it was recognized as an ‘oil stock’ and its stock price increased. After the publication of the ‘Corporate Value Enhancement Plan’ disclosure guidelines on the 2nd of this month, stock prices fell due to disappointment Data = F&Guide Data Guide On the other hand, HD Hyundai Heavy Industries, HD Hyundai’s main shipbuilding company, has seen its stock price drop since entering April despite the earnings shock It increased by 15.42%. First quarter operating profit was 21.3 billion won, 71.2% below the consensus (74 billion won). However, compared to the same period last year, it turned into a surplus.
The securities industry focused on growing the ‘special lines’ sector as a new growth engine. Recently, a contract was signed to supply construction materials and equipment for four Peruvian ships, and a business agreement (MOU) was signed with the Philly Shipyard of the United States to cooperate in projects related to government ships and warships. Jeong Yeon-seung, a researcher at NH Investment & Securities, said, “Maintenance and repair pilot projects involving US warships are expected to become visible, and there are also opportunities to export surface ships,” adding, “The valuation may expand as the special shipping business expands.” The target stock price rose from 150,000 won to 180,000 won through HD Hyundai Heavy Industries’ first quarter performance review report (analysis), which was well below expectations.
Reporter Han Kyung-woo, Hankyung.com case@hankyung.com
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