[THE INVESTOR] Hyundai Motor’s second-quarter earnings will be slower than expected, said Hana Financial Investment on July 6, lowering the target price to 160,000 won (US$142.90) from 180,000 won.
Dragged down by the unfavorable currency exchange rate, revenue in the period will come in at 24.3 trillion won and operating profit 916.3 billion won, slightly lower than market consensus, said analyst Song Seon-jae.
Despite the fall in the won-dollar rate, revenue was maintained at the level of last year as wholesale remained solid and product portfolio was improved in domestic market, explained the analyst.
Operating profit, however, dropped 32 percent on-year, as export payability weakened while appropriation funds for product warranty increased from currency rate decline, noted Song. Initial costs for expansion in eco-friendly automobiles also weighed down the bottom line, he said.
Amid the low season, sales momentum will be feeble until the end of the third quarter, but from the fourth quarter, sales are predicted to pick up on massive promotions and additional releases of new models, said Song, maintaining a “buy” recommendation.
By Hwang You-mee (firstname.lastname@example.org)