2Q26 margins hit by temporary headwinds 2H26 focus shifts to CID and new model cycle

研报英文原文证据摘录

2Q26 margins hit by temporary headwinds 2H26 focus shifts to CID and new model cycle

Global Markets Research

Hyundai Motor 005380.KS 005380 KS 23 July 2026

EQUITY: AUTOS & AUTO PARTS

Rating2Q26 margins hit by temporary headwinds Remains Buy

Target price

Reduced from2H26 focus shifts to CID and new model cycle KRW 600,000 KRW 670,000

Action: Maintain Buy; revise down TP to KRW600,000 Closing23 July 2026price KRW 432,000

We maintain Buy but reduce our SOTP-based TP by 12% to KRW600,000, mainly as we

trim 2026F/27F EPS by 6%/4%. The TP cut reflects the 1H26 earnings drag from Implied upside +38.9%

supplier-driven production disruptions and elevated incentives. However, we view 1H26

as an operational trough and expect a 2H26F inflection, where wholesale volumes Market Cap (USD mn) 60,206.5

rebound to +4% y-y (from -5% in 1H) driven by key new model launches, including the ADT (USD mn) 648.8

Avante, Tucson, Ioniq 3, and Genesis GV90. While traditional auto earnings are

stabilizing, we reiterate that Hyundai’s long-term re-rating story hinges on its Relative performance chart

transformation into a global robotics and software-defined vehicle (SDV) leader. The

primary downside risk to our TP is KRW appreciation vs the USD.

2Q26 OP missed consensus by 5% on production disruption and European sales

2Q26 revenue (+2% y-y) met consensus estimate, supported by HMC’s record-high HEV

sales mix (19%), and FX tailwinds (average USD/KRW up 7% y-y). However, OP fell 21%

y-y, missing the consensus estimate by 5%. Global wholesales fell 7% y-y, dragged down

by domestic production disruption caused by a fire at a key engine valve supplier and a

notable weakness in Europe (-11% y-y vs. industry +3%), China (-37%) and APAC (-12%

y-y), despite a solid US performance (+1% y-y).