Korea Investment & Securities has assessed that Hyundai Motor Company's transition from an automobile manufacturer to a physical AI and technology firm is a valid growth path. The firm maintained its investment rating of 'Buy' and a target price of 640,000 won.
In a report released on August 27, following Hyundai's CEO Investor Day, analyst Kim Chang-ho positively evaluated the company's transformation strategy. Hyundai plans to internalize software technology, production and sales capabilities, and computing infrastructure at the group level, based on a data flywheel.
Regarding its robotics business, Hyundai reaffirmed that mass production of Boston Dynamics' robotics will begin in 2028. The company has secured an initial order of 25,000 units, focusing on factories within its affiliates, including HMGMA. The first mass-produced SDV, scheduled for release in 2028, will feature the end-to-end autonomous driving system 'Atria AI.' Starting in 2029, Hyundai will also pursue independent data center operations, beginning with the Saemangeum AI data center.
However, Korea Investment & Securities considers Hyundai's target of selling 5.55 million vehicles by 2030 to be aggressive. The firm projects Hyundai's sales for 2026 to be 4.03 million units and estimates that, even in a positive scenario, realistic sales for 2030 would be around 4.5 million units, especially given the potential for three consecutive years of decline.
Consequently, the firm views Hyundai's projected operating profit margin of '9%+' for 2030 as overly optimistic, suggesting a more realistic range of 7% to 8%. The company's plan to reduce its cost of sales ratio by 3 percentage points by 2030 through lifecycle cost innovation and material cost reductions is also seen as somewhat aggressive, considering the development costs and investment scale associated with expanding its vehicle lineup.
Despite these concerns, Korea Investment & Securities believes that Hyundai's long-term growth trajectory through robotics mass production, SDV launches, and the accumulation of driving data and AI infrastructure remains valid. The firm has decided to keep its target price of 640,000 won unchanged, citing no specific changes to its earnings estimates following the company's guidance increase.
* This article has been translated by AI.
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