SEOUL, KOREA - We maintain BUY on Hyundai Motor (Hyundai) with a 12M TP of W280,000 at 9x 12MF PE, the trailing average. We believe the recent rebound can continue as 1) the resumed BRIC growth engine (see our Mar 15 company note BRICs leading the growth again) continues to rev up and 2) the consequent record overseas plant sales are more than offsetting reduced output at domestic plants following the refusal to work on Saturday since Mar. In 4M13, Hyundai’s global market share rose to 5.7% from 5.3% a year earlier. In comparison, its BRIC market share jumped to 5.9% from 5.1% in the period
- Hyundai’s sales grew 9.5% YoY to 1,577,080 in 4M13 and this faster growth was led by outstanding China (345,816, +37.1% YoY) and explosive Brazil (64,526, +125.1% YoY). Thanks to the stellar growth in China and Brazil despite a contraction in India (-7.1% YoY) and Russia (-0.6% YoY), its BRIC sales jumped 24.6% YoY in 4M13. Hyundai’s China car market share jumped to 4.8% from 3.9% a year earlier and in Brazil soared to 5.5% from 2.7% in the period.
- Thanks to the constant outrunning across BRIC markets, those countries’ portion of total sales rose to 38.1% in 4M13 from 33.5% a year earlier, compared to the global industry’s rise to 36.7% from 34.8% in the period. Meanwhile, on Apr 28, Hyundai announced that it would expand the capacity of the no. 3 China plant to from 300,000 to 450,000, which means it will have 1.05mn annual capacity in China from 2014. At this expanded line, Hyundai plans to add the Mistra midsize family sedan unveiled at the Shanghai Auto Show in Apr. In conclusion, we believe strong China sales will continue through 2014 and sustain the BRIC-led growth.
*Source: Korea Investment & Securities Co.
