DAOL Investment & Securities has named SL Corporation as its top preferred stock. It raised the target stock price from the previous 50,000 won to 43,000 won and presented an investment opinion of 'buy.' On the most recent trading day, the 21st, SL Corporation's closing price was 38,000 won.
On the 24th, Yoon Ji-woong, a researcher at DAOL Investment & Securities, noted that "the fair stock price of SL Corporation will be adjusted upward due to the global production increase of its major client, Hyundai Motor Group."
SL Corporation is a company that supplies headlights to Hyundai Motor Group and has manufacturing bases capable of exclusive supply to Hyundai Motor Group in the U.S. It is likely to benefit structurally from the announcement of joint production models between Hyundai Motor and GM.
Research Institute Yoon stated, "SL Corporation is guaranteed quantitative growth due to the increased production of GM's pickup trucks," and added that "based on a robust financial structure, the scale of the lamp business will continue to expand, resulting in an operating leverage effect."
Hyundai Motor Group is expected to mass-produce up to eight types of vehicles through the metaplants. Yoon's assessment is that it will be difficult to rely entirely on Hyundai Mobis' factory in Mexico.
He said, "Among auto parts companies, the one with the strongest profit and financial resilience is SL Corporation," explaining that "with the production plan of Hyundai Motor Group's metaplants being discussed, SL Corporation may also initiate additional expansions."
SL Corporation recorded an operating profit of 40.9 billion won in the fourth quarter of last year. This figure fell short of market expectations, but in the securities sector, attention is focused on the unique accounting method of SL Corporation, which means that labor costs and expense recognition are concentrated at the end of the year.
Research Institute Yoon noted, "As of the first quarter of this year, the burden of expense recognition will ease," adding, "We expect the maximum momentum (potential for stock price increase) among parts manufacturers, with a return to a quarterly operating profit in the 100 billion won range."