Hyundai Motors Corporation last update July 27th, 2023
This is not a recommendation or proposal to do anything. The data written in this article is not guarranteed. It is my private personal opinion. I`m not independing as I own a position of HMC shares.
Hyundai - Kia is one of the biggest car manufacturers in the world with 7 million vehicles. Hyundai Motors is a big part of it with 3.9 mio sold cars, revenues of 116 bn$ in 2022. The companies valuation is 41 bn$(July 27, 2023)
Risk & Chances
Potential motivation to buy Hyundai Motors stock: Hyundai managed to improve its profitability by an improved product mix with a higher SUV share. Revenues and profits recovered from covid panic. The P/E 2023e of 6 is an opportunity.
Not all decisions of Hyundai Motors follow the business logic. Ex. the company paid in 2014 10bn$ for a real estate in Seoul (2). I do not know the background. Potentially it could be a political background.
Some Data & Information
Share Price: July 27, 2023, 197500 KRW about 155$ is not expensive.
The company plans to allocate 30 to 50% of the annual Free Cash Flow for shareholder returns. The dividend yield at this stock price is perhaps 3%.
Debt is 112 tn KRW (Q4/22).
Some Informations
2021/02/26 Hyundai bought chips when rivals didn't; its assembly lines are still rolling. They are less affected by the chip crises than most of its competitors.
Interim dividends: Hyundai Motors suspended its interim dividends 2020 due to the uncertainty caused by the Covid-19 panic (20).
2020/01/02 Hyundai Motor Co and affiliate Kia Motors said on Thursday their combined 2019 global sales were 7.19 million vehicles, short of their target of 7.6 million vehicles. The South Korean duo announced a combined 2020 sales target of 7.54 million vehicles before Covid-19 panic. (16)
2019/12/05 Hyundai Motor plans to allocate about a third of its $51.2B investment budget into developing next-gen automobiles over the next six years, according to Nikkei Asian Review. Hyundai has a goal of selling 560K electric cars and 110K fuel-cell vehicles cumulatively by 2025. The new portfolio will kick off in 2021 when an electric version of the Genesis luxury car debuts. With an eye toward profitability, Hyundai expects to boost sales of highly profitable sport utility vehicles and raise its operating profit margin to 7% in 2022 and 8% in 2025. (15)
2019/10/14 Hyundai Motor Co and Kia Motors Corp earmarked a total of 760 mio. $ to settle U.S. class action litigation and address engine-related issues in the United States and South Korea (14)
2019/08/02 Hyundai Motor Co. is transforming its Chongqing Plant 5 in China into an electric vehicle (EV) plant in a bid to reinvigorate its slumping Chinese business. Last year, Chongqing Factory, which can produce 300,000 units a year, sold only 70,434 units in total. (13)
2019/06/07 A federal appeals court restored a $210 million nationwide class-action settlement for hundreds of thousands of owners of Hyundai Motor Co. and Kia Motors Corp. vehicles whose fuel economy estimates were inflated (10).
2019/01/02 Hyundai Motors forcasts a further increase of saled cars in 2019.
2018/12/17 Actually a class action law suit is prepared against Hyundai Motors on fire accidents with some of its cars (6)
2018/10/25
"Because of temporary cost factors such as expansion of World Cup marketing activities, recall of airbag controllers, and application of new engine diagnostics technology called 'KSDS' in the U.S., operating expenses increased and operating profit decreased," the company explained.(3) This is not really the information I like to read. New engine diagnostic systems and sport marketing events are things that occur regularly.
Number of outstanding stocks: Common stock 206,617,212; 1 st Preferred stock 22,859,122; 2 nd Preferred stock 36,164,489 3 rd Preferred stock 2,448,637 Total 268 mio. shares
Treasury stocks: Common stock 15,359,818 1 st preferred stock 2,445,984 2 nd preferred stock 1,740,855 3 rd preferred stock 48,817
The Global Automobile Market (Thousand units)
The global automobile demand shrank since Q1/2019 and imploded in the covid panic q2/20. It is still depressed. The car market of the future is most probably driven by India, Middle East and other developing countries.
References
Hyundai Motors IR pages.
(22) 2021/02/26 https://ca.finance.yahoo.com/news/analysis-hyundai-bought-chips-rivals-050255364.html?.tsrc=rss
(21) 2020/10/02 https://financialpost.com/pmn/business-pmn/hyundais-u-s-sales-rise-5-in-september
(20) 2020/07/23 https://finance.yahoo.com/news/hyundai-motor-second-quarter-profit-052739425.html?.tsrc=rss
(19) 2020/06/01 https://seekingalpha.com/news/3578880-hyundai-motor-sales-dropped-39-in-may
(18) 2020/05/06 https://finance.yahoo.com/news/hyundai-motor-sales-down-57-081333041.html?.tsrc=rss
(17) 2020/01/22 https://www.hyundai.com/content/hyundai/ww/data/ir/calendar/2020/0000000273/files/hmc-q4-2019-and-annual-business-results.pdf
(15) 2019/12/05 https://seekingalpha.com/news/3523742-hyundai-to-invest-heavily-in-next-gen-auto
(14) 2019/10/14 https://finance.yahoo.com/news/hyundai-kia-earmark-760-million-092253890.html?.tsrc=rss
(13) 2019/08/02 http://marketbeat.com/URL/?URL=http://www.businesskorea.co.kr/news/articleView.html?idxno=34410
(12) 2019/07/25 https://www.finanzen.net/nachricht/aktien/hyundai-motor-praesentierte-bilanzzahlen-zum-juengsten-jahresviertel-7754224
(11) 2019/06/20 https://www.finanzen.net/nachricht/aktien/ruecklaeufiges-geschaeft-ey-studie-autoindustrie-rutscht-tiefer-in-die-krise-7629337
(10) 2019/06/07 https://www.autonews.com/regulation-safety/us-appeals-court-upholds-210-million-hyundai-kia-gas-mileage-settlement
(9) 2019/04/24 https://www.hyundai.com/content/hyundai/ww/data/ir/calendar/2019/0000000234/files/19-04-24-hmc-q1-2019-business-results-pt.pdf
(8) 2019/01/24 https://www.finanzen.net/nachricht/nachricht-7058673
(7) 2019/01/02 https://www.finanzen.net/nachricht/nachricht-6983005
(6) https://www.finanzen.net/nachricht/nachricht-6943468
(5) 2018/12/06 https://www.finanzen.net/nachricht/aktien/hyundai-beschaeftigte-protestieren-gegen-plaene-fuer-niedriglohn-fabrik-6910914
4. 2018/10 https://eu.detroitnews.com/story/business/autos/general-motors/2018/04/12/general-motors-south-korea/33770137/
3. 2018/10 http://www.businesskorea.co.kr/news/articleView.html?idxno=26014
1. http://english.yonhapnews.co.kr/business/2018/09/30/0501000000AEN20180930003600320.html
2. https://www.reuters.com/article/us-kepco-realestate-hyundai-motor/hyundai-motors-record-10-billion-bid-for-trophy-property-alarms-investors-idUSKBN0HD06U20140918