KB Securities assessed on the 30th that HD Hyundai is anticipated to achieve record-high earnings in the future. With improved performance of major affiliates such as HD Korea Shipbuilding & Offshore Engineering, HD Hyundai Electronics, and HD Marine Solutions, it is expected that the existing dividend amount can also be maintained. The target stock price is set at 110,000 won, and the investment opinion remains "buy."
Chun Woo-jae, a researcher at KB Securities, noted, “The market condition of HD Hyundai Oilbank in the first half is sluggish, but the sales and operating profit of major affiliates are improving,” adding, “Even without dividends from Oilbank, the holding company's profit is estimated at 406.7 billion won due to the expansion of non-refining dividends.”
HD Hyundai's consolidated earnings for the first quarter recorded sales of 17.1 trillion won and operating profit of 1.3 trillion won. This is the largest operating profit in quarterly terms since the transition to a holding company structure in 2017. The notable improvement in profitability across major business sectors, including shipbuilding and offshore, has led to strong performance.
The subsidiary HD Korea Shipbuilding & Offshore Engineering reached 859.2 billion won due to productivity improvement and rising prices, but considering HD Hyundai's effective equity ratio of 26%, the controlling net profit stands at 219.2 billion won. In contrast, Oilbank's net profit decreased by 90% year-on-year to 31.1 billion won.
HD Hyundai's consolidated earnings for the second quarter are estimated to be 17.7 trillion won in sales and 1.2 trillion won in operating profit. This represents a 77% and 23% increase year-on-year, respectively. Due to the sharp drop in oil prices in early April, Oilbank's operating profit is expected to decline by 115.4 billion won compared to the previous quarter. However, considering that the performance of major non-refining affiliates has exceeded expectations every quarter, it is believed that HD Hyundai's profit estimates will rise further.
The former researcher analyzed, “HD Hyundai’s operating profit is estimated at 5.3 trillion won for this year and 6.5 trillion won for next year.”