Resilient earnings and improved 2H23 outlook
2Q23 review: In-line results despite headwinds
• For 2Q23, Hyundai Glovis announced revenue of W6.53tr and operating profit of W412.6bn, with the latter meeting the consensus. Despite a market downturn, overseas subsidiaries and core businesses, including pure car/truck carrier (PCTC) and complete knock-down (CKD), delivered top-line growth. The logistics division posted a solid OP margin of 9.4%, supporting overall operating profit. PCTC and CKD earnings contracted but should improve in 2H23 thanks to cost pass-through and the easing impact of FX rate movements.
Reiterate Buy and TP of W250,000; our top pick in transportation
• We retain our Buy rating and target price of W250,000 on Hyundai Glovis. Despite a recent rebound, the stock remains undervalued (P/E of 6x). Going forward, we expect the stock to advance further as worries over profits ease.
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