LS SECURITIES has lowered its target price for Hanon Systems to 4,500 won. This is based on the judgment that profitability is deteriorating due to the slowdown in the electric vehicle market. However, it maintained its investment opinion as "buy."
According to LS SECURITIES on the 9th, Hanon Systems’ sales in the first quarter were 2.6 trillion won, an 8.8% increase from the same period last year, but operating profit fell to 20.9 billion won, a decrease of 67.9% compared to a year ago.
Researcher Lee Byung-geun of LS SECURITIES said, "The exchange rate was favorable in the first quarter, but profitability deteriorated due to lower production volume than expected and a decrease in customer recovery (expense recovery)."
In particular, Hanon Systems saw a foreign exchange-related valuation profit of 25 billion won in the first quarter, but reported a net income loss of negative 22.6 billion won as interest and other expenses of 69 billion won were reflected.
Hanon Systems appears to be taking steps to improve its cost structure through a reduction in borrowing funds and restructuring, but LS SECURITIES projected that the effects of restructuring and organizational efficiency will appear starting in 2027.
The researcher noted, "Due to slow profitability improvement and the downturn in the electric vehicle market, the stock price and valuation are at low levels," and added that "orders are also being delayed due to tariffs and other impacts."