Hyundai Motor stocks closed at 399,000 won on the previous trading day, marking a 49.61% decline from the peak of 783,000 won and falling below 400,000 won for the first time since January 12. The decline was driven by foreign investors selling 10.88 trillion won worth of shares this year, reducing their ownership stake from 35.95% at year-end to 25.17%. Additional pressures came from a parts supplier fire in March that disrupted production, Turkey factory construction halting electric vehicle output, and ongoing union partial strikes over wage negotiations. Analysts expect Hyundai Motor's Q2 operating profit to fall below consensus estimates of 3.02 trillion won, with the company scheduled to announce earnings on the 23rd.
Foreign Investors Sell 10.88 Trillion Won in Hyundai Motor Shares
Foreign investors sold 10.88 trillion won worth of Hyundai Motor shares this year, according to Korea Exchange data through the previous trading day. Foreign ownership dropped from 35.95% at the end of last year to 25.17%, a decline of more than 10 percentage points. The stock's maximum drawdown from its all-time high of 783,000 won reached 49.61%, effectively cutting the share price in half. During intraday trading on the previous day, the stock fell as low as 394,500 won before closing at 399,000 won. The decline exceeded the losses of Korea's top two market-cap semiconductor companies, Samsung Electronics (-35.91%) and SK Hynix (-43.82%).
Q2 Operating Profit Estimates Fall Below Consensus
Securities firms project Hyundai Motor's Q2 operating profit will decrease more than 20% year-over-year. KB Securities estimated Q2 operating profit at 2.7123 trillion won on the previous day, while Mirae Asset Securities projected 2.86 trillion won. Both figures fall below the consensus estimate of 3.02 trillion won. Hyundai Motor is scheduled to announce Q2 earnings on the 23rd.
Parts Supplier Fire and Turkey Factory Construction Disrupt Production
Kang Seong-jin, a KB Securities researcher, stated that domestic sales were 20,000 units lower than expected due to the impact of a March fire at a parts supplier in Daejeon. European sales were 15,000 units lower than expected due to production suspension from electric vehicle line construction at the Turkey factory. The won/dollar exchange rate at the end of the period was 5.1% higher than expected, resulting in an additional 223.2 billion won reflected in warranty costs.
Union Conducts Partial Strikes Over Wage Negotiations
Hyundai Motor's union (Korean Metal Workers' Union Hyundai Motor Branch) conducted 4-hour partial strikes by team on the previous day. The union plans to continue 4-hour partial strikes on the current day and the 22nd over wage negotiations. Kim Jin-seok, a Mirae Asset Securities researcher, stated that domestic production disruption issues appear to have been resolved in June, but noted the need to monitor negotiation outcomes regarding the ongoing partial strikes while expecting sales recovery in July.
Analysts Downgrade Target Prices to 840,000-900,000 Won
KB Securities recently lowered its target price from 1.2 million won to 900,000 won. Mirae Asset Securities reduced its target price from 950,000 won to 840,000 won. The securities firms' target prices remain at least 60% higher than the current stock price. Kim Gwi-yeon, a Daishin Securities researcher, explained that Hyundai Motor rapidly reflected long-term growth expectations from robotics enthusiasm in its stock price since early this year, making it more sensitive to market corrections. The researcher expects the stock to rebound when robotics momentum resumes in the market and continue its role as the sector's leading stock.
FAQ
What caused Hyundai Motor stocks to fall below 400,000 won?
Hyundai Motor stocks closed at 399,000 won on the previous trading day, falling below 400,000 won for the first time since January 12. The decline was driven by foreign investors selling 10.88 trillion won worth of shares this year, a parts supplier fire in March that reduced domestic sales by 20,000 units, Turkey factory construction that reduced European sales by 15,000 units, and ongoing union partial strikes over wage negotiations.
When will Hyundai Motor announce Q2 earnings?
Hyundai Motor is scheduled to announce Q2 earnings on the 23rd. Analysts project Q2 operating profit will fall below the consensus estimate of 3.02 trillion won, with KB Securities estimating 2.7123 trillion won and Mirae Asset Securities estimating 2.86 trillion won.
How much have foreign investors reduced their stake in Hyundai Motor?
Foreign ownership in Hyundai Motor dropped from 35.95% at the end of last year to 25.17% as of the previous trading day, a decline of more than 10 percentage points. Foreign investors sold 10.88 trillion won worth of Hyundai Motor shares this year.
