April 25, 2024

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[THE INVESTOR] Hanon Systems will benefit as eco-friendly vehicles become more popular, said Heungkuk Securities on Nov. 21, suggesting a “buy” recommendation and 16,000 won (US$14.58) target price. 

Duct system is one of the auto parts that is becoming more important for eco-friendly cars, and Hanon is one of the top three makers worldwide, said analyst Park Sang-won. 

Its electric compressor sector will grow at an average 32 percent yearly, while it will be able to maintain its share in the duct system market for the time being, he noted. The company has a 14 percent market share in electric compressor sector and is the sole vendor for Hyundai Motor, Tesla and BMW, he added.

It will further gain from the Chinese government’s policy on eco-friendly cars that will push the country’s plugged in hybrid vehicles and battery-powered EV market up 56 percent, forecast the analyst. 

Hanon Systems’ revenue next year will rise 12.9 percent to 6.4 trillion won and operating profit by 19.9 percent to 544.0 billion won from 2017, according to Park.

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