S. Korea Autos, Batteries, and Energy & Materials: Investor Presentation | Asia Pacific

Research evidence excerpt

S. Korea Autos, Batteries, and Energy & Materials: Investor Presentation | Asia Pacific

FoundationM

Executive Summary – S. Korea Autos

• HMC (OW, PT W570,000) – Recent market corrections following the earlier re-rating have brought back its valuation to more reasonable

levels. With HMC at the forefront of physical AI narrative in Korea, we expect this optionality to support valuation while underlying

fundamentals begin to bottom.

• Kia (OW, PT W200,000) – Kia has attracted less excitement around physical AI despite its own physical AI exposure. Meanwhile,

underlying fundamentals remain healthy, and valuation looks very affordable at 6.6x 2027e P/E.

• Hyundai MOBIS (OW, PT W570,000) – Despite slower-than-expected rebound in the module business, its A/S business continues to

cushion the downside and limits earnings/margin downside risk. In robotics, MOBIS has emerged as one of the leading suppliers in Korea

and we expect its valuation premium to remain.

• Hankook Tire (OW, PT W93,000) – Despite the market's initial fear of input cost headwinds weighing on HT's 2H26 profitability outlook, we

see a series of price hikes offsetting the input cost pressure and expect HT to sustain healthy tire margins. Moreover, its commitment to

higher shareholder return should support the case for further re-rating of its shares.

• Mando (EW, PT W55,000) – Despite growing expectations for the company's entry into the robotics business, we believe further re-rating

at this stage would likely require greater clarity on robotics order momentum, which we see as less likely in the near term. At 11.3x 2026e

P/E vs. 7% ROE, we see fairly balanced risk/reward.

• Hanon Systems (UW, PT W3,200) – Despite solid operational execution, we remain more conservative on Hanon, due to 1) limited top-line