Shinhan Investment & Securities maintained its 'buy' rating for Hyundai Motor on July 10, adjusting the target price to 780,000 won — a 2.5% reduction — while projecting 75.1% upside from the July 9 closing price of 445,500 won. The brokerage stated that Q2 2025 performance concerns have already been reflected in the stock price, with production normalization and hybrid electric vehicle (HEV) sales expansion expected to drive recovery in the second half. Hyundai Motor faced temporary production disruptions in Q2 due to a fire at parts supplier Anseonggongup, which impacted SUV output including the Santa Fe model, leading to a 15.9% decline in domestic sales. Shinhan Investment & Securities forecasts Hyundai Motor's Q2 2025 operating profit at 3 trillion won, down 16.8% year-over-year, but expects sequential improvement with Q3 operating profit rising 26.6% YoY to 3.2 trillion won and Q4 profit surging 80.3% YoY to 3.1 trillion won as production stabilizes and new vehicle launches take effect.
Shinhan Investment & Securities Maintains Buy Rating Despite Target Price Adjustment to 780,000 Won
Shinhan Investment & Securities kept its 'buy' recommendation for Hyundai Motor stocks while lowering the target price to 780,000 won from the previous level, representing a 2.5% reduction. Based on the July 9 closing price of 445,500 won, the revised target implies a 75.1% upside potential. The brokerage stated in its July 10 report that "Q2 weakness has been priced in, and H2 recovery along with robotics and SDV events are waiting," adding that "while stock price volatility remains around the earnings announcement, it is a time worth expecting a stock price rebound in the second half." The target price adjustment reflected changes in price-to-earnings ratios of Chinese SDV-related automakers, but the firm maintained its positive investment stance based on the view that Q2 performance concerns are already reflected in the stock price and that H2 profit recovery and future mobility events remain ahead.
Hyundai Motor Q2 2025 Sales Decline Driven by Production Disruptions and Regional Weakness
Hyundai Motor's Q2 2025 operating profit is expected to reach 3 trillion won, down 16.8% year-over-year. Shinhan Investment & Securities noted this figure falls below the market consensus of 3.2 trillion won but likely aligns with recently lowered market expectations of 2.9 trillion to 3 trillion won. Factors behind the weak performance include reduced sales volume, production disruptions, increased incentives in Europe, year-end exchange rate revaluation, and raw material and tariff burdens. Domestic sales fell 15.9% due to production disruptions of SUVs including the Santa Fe following the Anseonggongup fire. Europe sales declined 9.8% due to intensified competition with Chinese companies and gaps in the electric vehicle lineup. Middle East sales dropped 25.7% due to the impact of regional conflicts. North America and Central/South America sales performed relatively well. Eco-friendly vehicle sales reached 269,000 units in Q2, up 2.7% year-over-year, with hybrid vehicle sales expansion in the U.S. playing a positive role in defending average selling prices and profitability. However, in Europe, incentive burdens increased due to electric vehicle lineup gaps and competition with Chinese companies. The brokerage noted that tariff burdens have not been completely resolved, with 860 billion won in tariff costs reflected in Q1, though Hyundai Motor Group Metaplant America (HMGMA) capacity utilization increases and mix improvements provided partial mitigation.
Analyst Forecasts Sequential Operating Profit Growth in H2 2025
Shinhan Investment & Securities projects Hyundai Motor's operating profit will reach 3.2 trillion won in Q3 2025, up 26.6% year-over-year, and 3.1 trillion won in Q4 2025, up 80.3% year-over-year. The brokerage stated that the atmosphere could change in the second half, with production disruption normalization, increased U.S. hybrid vehicle sales, new vehicle effects, Ioniq 3 launch in Europe, and tariff base effects expected to be reflected starting in Q3. Following the Q2 decline, double-digit profit growth is possible in the second half, according to the analyst assessment.
Upcoming Catalysts Include Beijing Robot Expo and CEO Investor Day
Shinhan Investment & Securities identified several events as variables to watch going forward: the Beijing Robot Expo, partial unveiling of the SDV Pacecar, and a CEO Investor Day. The brokerage suggested that if events related to future growth drivers such as robotics and SDV align with earnings recovery, a valuation re-rating of Hyundai Motor becomes possible. The firm maintained its buy recommendation based on the view that Q2 performance concerns have been priced into the stock and that H2 profit recovery and future mobility events remain on the horizon.
FAQ
What target price did Shinhan Investment & Securities set for Hyundai Motor stocks on July 10?
Shinhan Investment & Securities set a target price of 780,000 won for Hyundai Motor, representing a 2.5% reduction from the previous target, while maintaining a 'buy' rating. Based on the July 9 closing price of 445,500 won, this implies a 75.1% upside potential.
Why did Hyundai Motor's domestic sales decline 15.9% in Q2 2025?
Domestic sales fell 15.9% due to production disruptions of SUVs including the Santa Fe following a fire at parts supplier Anseonggongup, which impacted the company's SUV output during the quarter.
What are Shinhan Investment & Securities' operating profit forecasts for Hyundai Motor in H2 2025?
Shinhan Investment & Securities forecasts Hyundai Motor's Q3 2025 operating profit at 3.2 trillion won (up 26.6% year-over-year) and Q4 2025 operating profit at 3.1 trillion won (up 80.3% year-over-year), expecting double-digit profit growth in the second half following Q2's decline.
