Securities firms have positively assessed Hyundai Glovis' stock, raising its target price, as the company is expected to see improved performance following the renewal of maritime transportation contracts with Hyundai Motor and Kia.

According to the Korea Exchange on January 5, Hyundai Glovis closed at 134,500 KRW on January 3, up 0.52% from the previous trading day. Over the past three trading days, the stock has surged approximately 15%, continuing its upward trend. This sharp rise is attributed to improved investor sentiment following the announcement on December 31 of a five-year long-term maritime transportation contract with Hyundai Motor and Kia, valued at approximately 6.7 trillion KRW.

The new contract extends the previous three-year agreement to five years and significantly increases the contract value. Yang Ji-hwan, a researcher at Daishin Securities, commented, "This renewal of the long-term transportation contract is considered an exceptional outcome that exceeds market expectations." He explained, "The annualized contract value amounts to approximately 1.34 trillion KRW, which represents a 105% increase compared to the 6,550 billion KRW annual average of the previous three-year, 1.9 trillion KRW contract signed in 2021."

As expectations for Hyundai Glovis' profitability improvement grow, securities firms have consecutively raised their target prices for the company. Daishin Securities increased its target price from 160,000 KRW to 170,000 KRW. Researcher Yang noted, "The proportion of Hyundai Motor and Kia's shipping volume has decreased from 60% to 50%, reducing the company's reliance on affiliates. Additionally, the five-year long-term transportation contract, reflecting the peak boom in pure car carrier (PCC) freight rates, has further strengthened performance stability."

Hana Securities also raised its target price for Hyundai Glovis from 150,000 KRW to 164,000 KRW. Researcher Song Seon-jae from Hana Securities stated, "Hyundai Glovis is improving profitability by acquiring new customers, such as Chinese automakers, which has led to an increase in non-affiliate sales. Non-affiliate volumes are estimated to have grown by over 30% last year and continue to rise." He added, "Considering these factors, Hyundai Glovis' revenue from finished car maritime transportation is expected to grow by 11% this year."

Alongside performance improvement, enhanced shareholder returns are also anticipated. Researcher Song emphasized, "While the growth potential of core business units is strengthening, Hyundai Glovis is also expected to expand shareholder returns, including a dividend payout ratio of at least 25% and a minimum 5% increase in dividends per share (DPS). Additionally, the company has set ambitious business goals of achieving over 40 trillion KRW in revenue and a return on equity (ROE) of more than 15% by 2030, which will further enhance shareholder value."

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