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Hyundai Motor’s Market Cap Falls to 6th in Seoul Bourse
Sluggish Performance at Home and Abroad
Hyundai Motor’s Market Cap Falls to 6th in Seoul Bourse
  • By Yoon Young-sil
  • July 6, 2018, 11:24
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Hyundai Motor’s market cap, which once ranked second in the Seoul bourse, has lost about 9 trillion won (US$8.04 billion) as of July 5 compared to this year’s high mark, slipping to 6th place.
Hyundai Motor’s market cap, which once ranked second in the Seoul bourse, has lost about 9 trillion won (US$8.04 billion) as of July 5 compared to this year’s high mark, slipping out of the top five.

With unfavorable factors at home and abroad, such as pressure on trade under Trump's presidency, weak domestic demand and labor strike, Hyundai Motor Co. is stepping backwards on the stock market. The company’s market cap, which once ranked second, has lost about 9 trillion won (US$8.04 billion) compared to this year’s high mark, slipping out of the top five.

The price of Hyundai Motor shares closed at 121,500 won (US$108.58) on the main KOSPI bourse on July 5, up 1.67 percent from the previous day. It hit a new record low again as it fell to 118,000 won (US$105.45) during mid-day trading. With strong buying at low prices at the end of trading, the company barely saw its stock prices bound.

The price of Hyundai Motor shares had plunged until the 4th. It closed at 119,500 won (US$106.79), recording the lowest closing price for the first time in eight years since April 19, 2010. Accordingly, Hyundai Motor’s market cap stood at 26.9 trillion won (US$24.04 billion), ranking sixth among the companies traded on South Korea’s main stock market. The figure fell short of not only 297 trillion won (US$265.42 billion) of Samsung Electronics Co. and 62 trillion won (US$55.41 billion) of SK Hynix Inc. but also 28 trillion won (US$25.02 billion) of Samsung Biologics Co. and 27 trillion won (US$24.13 billion) of POSCO Co. Considering the fact that Hyundai Motor took second place in terms of market cap after Samsung Electronics until a few years ago, it is the most humiliating situation in its history.

The price of Hyundai Motor shares dropped 23.4 percent until the 4th from the beginning of the year. The company’s market cap decreased 6 trillion won (US$5.36 billion) from 33 trillion won (US$29.49 billion) at the beginning of the year and as much as 9.3 trillion won (US$8.31 billion) from 36 trillion won (US$32.17 billion) of this year’s highest mark on April 25.

This is largely due to sluggish global sales. Hyundai Motor already suffered an earnings shock in the first quarter of this year and market experts are lowering the company’s performance projections in the second quarter. According to securities industry sources, securities companies lowered Hyundai Motor’s operating profit projections for the second quarter by a whopping 21.5 percent from 1.3 trillion won (US$1.16 billion) in March to 1 trillion won (US$893.66 million) at the end of June. Hyundai Motor also scrapped plans to reform its corporate governance structure due to the strong opposition of U.S. hedge fund Elliott Management.

On the other hand, some experts say that Hyundai Motor is about to pass through a long poor performance tunnel. The company sold 64,000 cars in June in the US market, which accounts for the most of its operating profits after South Korea. It showed a high growth rate for the second consecutive month after 74,000 cars in May. Although Hyundai Motor saw its sedan sales slightly decrease, it sold 4,600 units of the Kona, which was introduced early this year to beef up the SUV lines. The company’s Alabama plant also shows a higher rate of operation as it starts local production of the new Santa Fe. Starting with June, Hyundai Motor’s production and sales in the US are improving.