Analysts are buoyant about Hyundai AutoEver Corp., in-house IT unit of South Korean auto giant Hyundai Motor Group under the parent’s attention amid increasing role of software behind future mobility technology such as autonomous driving.
The stock is under correction after 23 percent jump last month. Hyundai AutoEver shares fell 4.07 percent to end at 129,500 won ($108.27) on Tuesday after closing the previous session 3.23 percent down at 135,000 won.
As of the third quarter 2021, the company earned 50 percent of its revenue from IT system operation and management, 37 percent from IT consulting, and 13 percent from automotive software. Analysts expect an accelerated growth of the company with the arrival of self-driving technology.
“Hyundai AutoEver will expand the business scope to mobility software and service platform, making a leap forward to a leader in mobility technology beyond IT service,” said Lee Sang-heon, an analyst at HI Investment & Securities.
Hyundai Motor Group Chairman Chung Euisun last week sold a 3.3 percent stake in Hyundai Glovis Co. on Jan. 5, grabbing attention to a possible reorganization of the group governance from market investors. Chung now owns a 7.33 percent stake in Hyundai AutoEver as the biggest individual shareholder, relatively bigger than his stakes in the group’s three key units – 2.62 percent in Hyundai Motor Co., 1.74 percent in Kia Corp., and 0.32 percent in Hyundai Mobis Co.
In late 2020, the auto conglomerate announced its business reorganization under which Hyundai Mobis acquired the automotive semiconductor business of Hyundai Autron Co., and Hyundai AutoEver merged with Hyundai MnSOFT and Hyundai Autron.
Hyundai AutoEver is estimated to have earned an operating profit of 23.3 billion won in the final quarter of last year, losing 12 percent on year, with sales up 39 percent to 618.9 billion won, according to Kim Hyun-yong, an analyst at Hyundai Motor Securities. Revenue from automotive software, however, is expected to have exceeded 100 billion won for the first time in the quarter, he added.
This year’s outlook is brighter. Hyundai AutoEver’s operating profit is projected to gain 46 percent on year to 136.2 billion won with sales up 12 percent to 2.3 trillion won, according to estimates by Hyundai Motor Securities.
By Kang Bong-jin and Lee Ha-yeon
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