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The Hyundai Motor headquarters building in Yangjae-dong, Gangnam-gu, Seoul. (Photo: Yonhap News Agency) |
[Alpha Biz= Kim Sangjin] Hyundai Motor achieved an operating profit of 2.8 trillion KRW in the fourth quarter of 2024, marking a 17.2% decrease compared to the same period last year. This performance fell short of market expectations. The main reasons for the poor results were an increase in incentives and a decline in the impact of exchange rates.
On January 24, iM Securities explained that the negative impact on Hyundai's performance included a 4.25 trillion KRW drop due to increased incentives and the reduction in mix effects caused by delayed inventory, and a 3.2 trillion KRW decrease in exchange rate effects due to a sharp rise in the exchange rate at the end of the period.
On the positive side, there was an increase of 1.65 trillion KRW in the financial sector and a 360 billion KRW positive effect from higher production volumes, but these were not enough to offset the losses.
For 2025, Hyundai Motor has set guidance with a forecasted sales volume of 4.174 million units, an increase in revenue of 3-4%, and an operating profit margin of 7-8%. The company expects improvements in average selling price (ASP) driven by growth in electric vehicle (EV) and hybrid sales, an increase in the share of SUVs and Genesis models, and favorable exchange rate conditions.
iM Securities pointed out that concerns about potential tariffs imposed by President Trump were not factored into these projections. They noted that Hyundai had mentioned the possibility of tariffs between April and June, and even with the rapid ramp-up of production at the HMGMA plant, approximately 1 trillion KRW in tariff burdens were anticipated. For 2025, annual revenue is projected to be 181.1 trillion KRW (up 3.4% year-on-year), and operating profit is forecast to be 13.5 trillion KRW (down 5.5%).
Hyundai Motor also decided to pay a year-end dividend of 6,000 KRW per share as part of its shareholder return policy and plans to maintain a total shareholder return (TSR) of over 35% this year. Securities firms have downgraded Hyundai's target price to 320,000 KRW with a "Buy" rating, forecasting that the expansion of production at the HMGMA electric vehicle plant in Bryan County, Georgia, USA, will serve as a positive catalyst for the stock price.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
