Holding Pattern
Hyundai Motor once again achieved a record-breaking quarterly performance, surpassing 4 trillion won (US$3.14 billion) in operating profit for the second quarter of this year. Despite this remarkable feat, the company’s stock price on the KOSPI market remains stuck in a holding pattern.
On July 26, Hyundai’s stock closed at 198,700 won, down 0.90 percent from the previous trading day. The stock experienced a temporary uptick during the day, but the momentum couldn’t be sustained as foreign investors and institutions continued their selling spree. As a result, the company’s market capitalization slipped to the 10th position, yielding to POSCO Holdings after facing a decline on the previous day.
According to Hyundai’s announcement, the company’s IFRS consolidated revenue for the second quarter of this year reached 42.2497 trillion won, representing a substantial 17.4 percent increase compared to the same period last year. Additionally, operating profit surged by a whopping 42.2 percent, totaling 4.2379 trillion won. The net profit, including minority interest, also witnessed growth, rising by 8.5 percent to 3.3468 trillion won.
The operating profit is the highest ever recorded for a single quarter, and Hyundai has achieved its largest operating profit for three consecutive quarters.
However, this historic achievement has also turned into a double-edged sword for Hyundai’s stock. The decline in stock price can be partly attributed to concerns about the peak-out phenomenon following the all-time high performance since the fourth quarter of the previous year. Brokerage Firms predict that Hyundai’s operating profit for the third quarter will decline compared to the previous quarter with an estimated value of 3.261 trillion won, according to market researcher FnGuide.
Nonetheless, the prevailing consensus holds that Hyundai’s status as a global automotive behemoth is undervalued, leaving substantial room for further appreciation in its market valuation.