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Better-than-feared results expected on manufacturing recovery, A/S tailwinds

Hyundai Mobis is scheduled to release its 2Q26 results on Jul. 24. We estimate revenue at W16.9tr (+6.2% YoY; 1% above the consensus of W16.7tr) and operating profit at W931.5bn (+7.1% YoY; 3% above the consensus of W908.8bn), better than previously feared. Losses in the manufacturing segment likely narrowed significantly. We estimate that the impact of tariffs remained limited, while higher EV sales by major customers and favorable FX likely provided support. That said, we estimate that AMPC recognition declined to around W20bn (vs. W45bn in 2Q25), reflecting the drop in Hyundai Motor Group’s (HMG) US EV production (from 35,000 units in 2Q25 to 17,000 units in 1Q26).

In the A/S unit, margins likely remained strong in the 26% range, supported by favorable FX and a lower tariff burden. With inventories imported under the previous 25% US tariff rate largely depleted, the benefit of the lower 15% tariff rate likely began to be reflected in earnings from 2Q26.

Key earnings risks include higher semiconductor prices, the fire at the India plant, and rising freight costs. Management estimates the full-year impact of higher chip prices at around W200bn (including around W30bn in 1Q26), though the final outcome will depend on price negotiations with customers. The impact of the India plant fire is being mitigated through alternative sourcing from other regions, and losses are likely to be covered by insurance. Meanwhile, rising transportation costs should have a limited near-term impact, as freight costs represent only a low-single-digit share of A/S revenue and are typically reflected in earnings with a five- to six-month lag.

Focus likely to shift back to robotics catalysts (Boston Dynamics and US policy)

Following earnings season, we expect market attention to shift back to robotics. Key upcoming catalysts include the launch of the Robot Metaplant Application Center (RMAC) in the US in August and a potential update on the group’s robotics strategy during Hyundai Motor’s CEO Investor Day on Aug. 26. For the planned US robot production facility and actuator plant to begin operations in 2028, construction would likely need to start in 4Q26-1Q27. Based on planned 2028 actuator capacity of 350,000 units―equivalent to roughly 10,000 Atlas units―we estimate the potential revenue contribution at W300-400bn. Meanwhile, the markup of the US FY2027 National Defense Authorization Act points to tighter restrictions on Chinese companies.

Although there has been no official announcement since media reports in late June indicated that SoftBank intended to exercise its put option on its remaining stake in Boston Dynamics, we believe HMG is likely to acquire full ownership of Boston Dynamics. Accordingly, attention should now shift to the potential entry of external investors through a subsequent equity financing round and the resulting valuation uplift. As the group’s robotics business advances, investor interest in Hyundai Mobis is likely to increase, given its potential to benefit from any governance restructuring. We maintain our target price of W920,000. Our target market cap of W84tr reflects the combined value of the company’s core business and Boston Dynamics holdings.