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Entering a premium valuation phase

4Q25 preview: Solid earnings likely continued despite uncertainty

For 4Q25, we expect Hyundai Glovis to post revenue of W7.56tr (+3.7% YoY). Distribution revenue likely increased 4.9% YoY on favorable FX effects, and the shipping division likely returned to YoY growth (+1.9%), supported by the normalization of production at a Chinese automotive OEM customer. Meanwhile, due to weakness in forwarding, we estimate logistics revenue growth was relatively muted at +3.2% YoY.

We estimate operating profit rose 15.7% YoY to W531.7bn, broadly in line with the consensus (W536.3bn). Distribution operating profit likely increased 22.5% YoY to W156.5bn, supported by favorable FX effects in the CKD segment. In the shipping business, where margins have expanded sharply recently, operating profit growth likely accelerated further (+97.7% YoY to W191.2bn) despite new US port fees.

From discount to premium: Further cost improvements and robotics expectations

For 2026, we now look for operating profit of W2.24tr, up 11.6% from our previous estimate. The company now aims to introduce seven new long-term chartered vessels this year (vs. original plan of six), while the easing of tariff uncertainties should support continued strength in auto export volumes. Together, these factors are likely to drive further margin expansion in the shipping business. Additionally, sustained won weakness should continue to support the CKD business through 1H26.

Alongside solid earnings momentum, expectations around the value of the company’s 11.25% stake in Boston Dynamics are likely to build. Based on Boston Dynamics’ production target of 30,000 robots annually starting in 2028, the value of this stake could exceed W3tr even under conservative assumptions.

Maintain Buy and lift TP to W290,000; valuation premium to materialize

We raise our target price for Hyundai Glovis to W290,000 (from W210,000), as we shifted our valuation base period and revised up our target multiple (6.5x EV/EBITDA; 30% premium to the sector average). Our target price corresponds to a 2026F P/E of 13x, which we view as an undemanding level (in line with the company’s valuation peak in 2020). The stock’s recent gains have helped unwind its valuation discount, and going forward, we see potential for a valuation premium as cost reductions accelerate and the value of the firm’s stake in Boston Dynamics gains greater recognition.