[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 13th that it is maintaining its “Buy” investment rating and target price of 319,000 won for HYUNDAIGLOVIS Co.,LTD(086280).

Jeong Yeon-seung, an analyst at NH INVESTMENT & SECURITIES, stated, “Changes to annual earnings estimates are limited. The current stock price stands at a P/E ratio of 7.8, having given back most of the gains it made earlier this year on expectations surrounding Boston Dynamics.” He added, “We believe the current stock price presents an opportunity for bargain hunting, capitalizing on the profit growth momentum in the shipping division set to begin in the third quarter.”
He noted, “Exports of finished vehicles from China have been stronger than expected, causing the annual charter rate for 6,500-CEU-class car carriers (1 CEU = space capable of transporting one vehicle) to rise from an average of $42,500 per day to $70,000 as of the end of June.” He added, “Shipowners have placed new orders for vessels, anticipating that the strong market conditions will persist for the long term.” HYUNDAIGLOVIS Co.,LTD plans to introduce five large 10,800-CEU-class vessels in the second half of the year. This will enable the company to expand its spot business and serve as leverage in volume negotiations with Chinese automakers,” he added.
The company is projected to report second-quarter revenue of 7.9991 trillion won (up 6.4% year-over-year) and operating profit of 480.3 billion won (down 10.9%, operating margin of 6.0%), both of which are expected to fall short of market consensus. Analyst Jeong explained, “This reflects the sharp rise in fuel costs caused by the war.”
However, he emphasized, “We understand that settlements for the increased fuel costs began in June. Profit expectations for the second half of the year have actually improved. The strength of spot freight rates can be confirmed through the continuously rising charter rates for car carriers,” adding, “Furthermore, with the planned deployment of new large car carriers, we expect simultaneous growth in both P (freight rates) and Q (cargo volume).”
He continued, “We also anticipate an increase in revenue and operating profit for the Distribution Business Division due to rising container freight rates. We expect third-quarter operating profit to reach a record high of 568.3 billion won (+8.5%).”