April 27, 2024

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[THE INVESTOR] Hyundai Mobis’ first-quarter earnings will be dragged down by slow sales in China, said Eugene Investment and Securities on March 29.

Hyundai Mobis plant in Beijing

Its revenue will fall 7.2 percent to 8.6 trillion won (US$7.72 billion) and operating profit by 11.7 percent to 634.2 billion won from the same period last year, estimated analyst Lee Jae-il. 

Kia Motors’ sales in China are slow and Hyundai Motor’s fourth plant has been temporarily suspended. The South Korean won’s strength against major currencies could also dent earnings, explained the analyst.

Auto parts companies are particularly dependent on sales in China as the region has higher margins. If the China risk is resolved Hyundai Mobis’ bottom line will be lifted by the expansion of Hyundai’s fourth factory in China and Kia’s plant in Mexico, added Lee maintaining a “buy” recommendation and 305,000 won target price. 

By Hwang You-mee (glamazon@heraldcorp.com)