[Edaily Reporter Kim Kyung-eun ] On the 27th, SamsungSecurities lowered its target price for HyundaiMotor(005380)from 650,000 won to 600,000 won, a 7.7% reduction. This decision stems from the assessment that while HyundaiMotor Group is expanding its robotics business as a future growth engine, it is being driven primarily by separate subsidiaries rather than HyundaiMotor itself, making it difficult for the growth value of the robotics business to be fully attributed to HyundaiMotor shareholders. The investment rating was maintained at “Buy.”

Lim Eun-young, an analyst at SamsungSecurities, stated in a report released today, “There are concerns that HyundaiMotor’s valuation may decline as the robotics business—which is highly anticipated by the stock market—is being conducted through a separate subsidiary.” The firm also applied a target price-to-earnings ratio (PER) of 17 times, a 5.5% reduction from the previous estimate.

SamsungSecurities calculated HyundaiMotor’s target P/E ratio by applying a 10% discount to the 12-month forward average P/E ratio of 18.9 times for China’s top four EV manufacturers. The firm factored in the discount because, while these leading Chinese EV manufacturers are also entering the robotics business, HyundaiMotor plans to pursue its robotics operations through a separate subsidiary. However, considering the possibility of U.S. Big Tech companies investing in Boston Dynamics (BD) and the U.S. government’s policies to foster the robotics industry, the firm applied a discount rate of only 10%.

Analyst Lim explained, “By operating the robotics business as a separate subsidiary, it becomes easier for HyundaiMotor Group affiliates to jointly invest or attract external investors, and it can reduce HyundaiMotor’s financial burden.” However, he added, “Since HyundaiMotor’s core business is focused on the automotive sector, which has a very low valuation, HyundaiMotor’s investment appeal will diminish as pure-play robotics companies go public.”

Analysts also suggest that this could put the company at a disadvantage in terms of raising funds through capital markets. Since the “Physical AI” business—which combines artificial intelligence (AI) and robotics—requires massive initial investment, the ability to secure funding itself acts as a barrier to entry. Researcher Lim pointed out, “If HyundaiMotor’s valuation declines, it could be at a disadvantage in competing with Tesla or Chinese electric vehicle manufacturers when it comes to raising funds.”

The possibility of a future spin-off of HyundaiMotor’s internal Robotics Lab was also cited as a risk factor. Given that neither HyundaiMotor nor KIA CORPORATION directly operates a robotics business, the analysis suggests that the likelihood of a spin-off increases as the Robotics Lab’s business scale expands. However, considering the government’s policy restricting dual listings, the analysis noted that it may be difficult for the spun-off entity to gain recognition of its corporate value through an IPO even after the spin-off. In this scenario, the analysis also noted the possibility that the value of the HyundaiMotor Group’s robotics business could become overly concentrated in Boston Dynamics.

The fact that the commercialization of autonomous driving technology is lagging behind competitors is also a concern. HyundaiMotor plans to apply Level 2+ autonomous driving technology to mass-produced vehicles starting in 2028. The plan is to test the architecture through the PACE Car in 2027 and then apply standard sensors and computing platforms to mass-produced vehicles starting in 2028 to accumulate data. SamsungSecurities predicted that, due to the delayed timing of technology implementation compared to competitors, the recovery of its domestic market share would also be delayed until 2027.

However, HyundaiMotor’s mid- to long-term growth targets remain unchanged. The company plans to maintain its goal of 5.55 million global sales by 2030 and expand production capacity by 1.27 million units. In North America, it aims to increase the number of hybrid models to more than 10 by 2030 and raise the share of hybrid sales to 50%. The company also aims to expand Genesis sales from 200,000 units this year to 350,000 units by 2030.

In fact, the company has raised its profitability targets for 2030. It has raised the operating profit margin target from the previous 8–9% to over 9% and plans to reduce the cost of goods sold ratio by 3 percentage points by 2030. It will maintain a shareholder return ratio of at least 35% and continue its policy of buying back and canceling 4 trillion won worth of treasury stock between 2025 and 2027.