LS SECURITIES evaluated on the 7th that Hyundai GLOVIS' guidance for this year was lower than market expectations, but was set conservatively when considering the exchange rate of the Korean won against the U.S. dollar.
LS SECURITIES maintained a 'buy' investment opinion on Hyundai GLOVIS and set a target price of 170,000 won, which is 25% higher than Hyundai GLOVIS' closing price of 136,100 won the previous day.
Hyundai GLOVIS announced its financial results for the fourth quarter of last year (October-December) the previous day, reporting consolidated revenue of 7.2879 trillion won and operating profit of 459.7 billion won, in line with market expectations.
However, immediately after the earnings announcement, the stock price fell by as much as 6.4%. Hyundai GLOVIS provided sales and operating profit guidance for this year of 28 trillion to 29 trillion won and 1.8 trillion to 1.9 trillion won, respectively, which fell short of the market expectation of 2 trillion won in operating profit.
Lee Jae-hyuk, a researcher at LS SECURITIES, noted that excessive disappointment needs to be guarded against, as Hyundai GLOVIS set its guidance based on an exchange rate of 1,320 won for the U.S. dollar, which is nearly 10% lower than the current exchange rate of 1,448 won.
The researcher also stated, "Considering that the guidance reflects a PCTC fleet of 92 ships, which is less than last year's fleet of 98 ships, as well as the potential benefits of resumed Suez Canal passage and increased effective sailing days, it is assessed that a conservative guidance that can be achieved without difficulty has been set."
The researcher concluded, "Concerns over the PCTC market have been offset by long-term contracts spanning five years, and I expect that 2025 will mark the year of earnings growth and increased shareholder returns for Hyundai GLOVIS."