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Hyundai Motor's Ulsan plant IONIQ 5 production line (photo=Hyundai Motor Group) |
[Alpha Biz=(Chicago) Reporter Paul Lee] The Korea Credit Rating raised the outlook for the credit rating of non-guaranteed bonds to "positive," saying the profit growth of Hyundai Motor Co. (005380) and Kia Motors Co. (000270) is not a temporary boom but a structural growth.
On the 19th, the Korea Credit Rating raised the credit rating of Hyundai Motor and Kia non-guaranteed bonds from 'AA + (stable)' to 'AA + (positive)'. A positive rating outlook means that the credit rating could be upgraded in the future.
The Korea Credit Rating based on the fact that Hyundai Motor and Kia are likely to continue their better performance than in the past on the back of structural growth, not a temporary boom. "The strong sales in advanced markets such as the U.S. and Western Europe and growth in India, major emerging markets, are fully replacing the sluggish Chinese market," the Korea Investors Service said.
It has given a positive outlook on concerns over slowing demand for electric vehicles that have recently been raised in the global market. "Hyundai Motor and Kia have secured technologies and production capabilities that can cope with various demands such as internal combustion locomotives, hybrid cars and electric vehicles, so they can respond flexibly to changes in market demand," the Korea Investors Service said. "We expect to gain long-term business competitiveness by securing a gap in production capacity and technology compared to their competitors."
Last month, Moody's, a global credit rating agency, raised Hyundai and Kia's credit rating from the previous Baa1 to A3, while Fitch also raised it from BBB+ to A-.
Alphabiz Reporter Kim SangJin(hoondork1977@alphabiz.co.kr)
