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A growing list of premium factors

4Q25 review: Core businesses lead growth

For 4Q25, Hyundai Glovis reported revenue of W7.47tr (+2.5% YoY) and operating profit of W508.2bn (+11% YoY). While the results came in slightly below the consensus, the company maintained solid double-digit operating profit growth. Net profit jumped 356% YoY to W440.7bn, supported by higher FX gains due to currency movements and a favorable base stemming from equity-method losses recorded in 4Q24.

The shipping division posted record operating profit of W212.3bn (+119% YoY), driven by higher non-affiliate volume and cost improvements. Despite production adjustments at overseas auto plants, distribution operating profit also continued growing (+2.8% YoY to W131.3bn), supported by knock-down (KD) exports to emerging markets. However, logistics operating profit fell 30% YoY to W164.6bn due to container market weakness.

2026 drivers: Cost improvement, margin expansion in China, Boston Dynamics

For 2026, management guided revenue of at least W31tr (+5% YoY) and operating profit of at least W2.1tr (flat YoY). While implied operating profit growth appears limited, we view the guidance as relatively conservative, as it is based on a USD/KRW rate assumption of 1,370. Notably, each increase of 10 in the USD/KRW rate translates to approximately W13bn in annual operating profit.

The weak container market is weighing on the logistics division, while the CKD business faces a tough comparison due to unusually favorable FX in 2025. Despite this, we expect company-wide margins to remain high, supported by the PCTC business. Beginning in 2Q26, the company plans to phase in six ultra-large PCTCs with capacity of around 10,000 vehicles each. Moreover, we see room for further margin improvement in the China-origin PCTC market, where the firm currently holds the largest market share.

Collaboration with Boston Dynamics, which develops both humanoid (Atlas) and specialized logistics robots (Stretch, etc.), should also move into a more active phase. Management stated that proof-of-concept programs will be carried out at US worksites and revealed plans to pursue system integration via collaboration with group affiliates.

Maintain Buy and raise TP to W310,000; focus on re-rating drivers

We maintain our Buy rating on Hyundai Glovis and raise our target price to W310,000 (from W290,000). Our target EV/EBITDA of 7x represents a 40% premium to peers. Given the firm’s conservative FX assumption, we view its 2026 guidance as positive. We also highlight: 1) clear improvement in the PCTC earnings trajectory, led by China; and 2) growing expectations for collaboration with Boston Dynamics. Together, these factors are likely to help further widen the stock’s valuation premium vs. peers.