Hyundai Motor (005380.KS): 2Q Miss, Yet Guiding at Better Earnings Momentum in 2H

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Hyundai Motor (005380.KS): 2Q Miss, Yet Guiding at Better Earnings Momentum in 2H

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23 Jul 2026 06:52:54 ET │ 15 pages

Hyundai Motor (005380.KS)

2Q Miss, Yet Guiding at Better Earnings Momentum in 2H

CITI'S TAKE

Hyundai Motor (HMC) recorded below consensus OP in 2Q, due to weak

volume / incentive spending / unfavorable mix / raw material cost burden.

That said, HMC is guiding at improving OPM (y/y basis) for both 3Q & 4Q, Buy

along with maintaining 2026 OPM guidance. After revising down FY26-28 Short-Term View: Upside

NP estimates by 6-8%, we lower our 12-m TP to W559,000.

Price (23 Jul 26 15:45) W432,000

2Q miss — HMC recorded W49tr revenue (+2% y/y) and W2.85tr OP (-21% y/y) in Target price W559,000↓

2Q26, OP coming in at 9% below consensus. Weaker-than-consensus OP resulted from W612,000

from: 1) W0.5tr OP headwind from weak volume; 2) W0.4tr OP headwind from Expected share priceincentive spending (amid intensified competition in key market & HMC digesting 29.4%

aging model ahead of full-model change of Avante / Tuscan in 2H); 3) W0.2tr OP return

headwind from powertrain mix (amid production glitch of Genesis / Palisade); & 4) Expected dividend yield 2.3%

W0.4tr OP headwind from raw material input cost (despite HMC acting on around Expected total return 31.7%50% buffer via raw material cost saving efforts).

Market Cap W88,455,355M

Yet, guiding at better earnings momentum in 2H — HMC expects incrementally US$59,872M

smaller OP headwind from raw material cost / incentive spending / volume in 2H, given:

1) more active full model change / new model launches in 2H26; 2) sign of less severe

raw material pricing trend in 2H26; and 3) previous supply chain issue now being

solved/normalized. All in all, HMC is confident in OPM expansion (on y/y basis) for both