Report

Hyundai Steel (004020.KS): Offloading non-core asset to enhance shareholder value

As part of efforts to resolve Hyundai Motor Group’s cross-shareholding structure, Hyundai Steel (HDS) decided to sell its stake in Hyundai Mobis to the group’s chairman Chung Mong-koo (MK) and his son and vice chairman Chung Eui-sun (ES).

It is a very meaningful move as it helps realize the value of a non-core asset. The proceeds from the sale will be used to repay debt. It will also have positive impacts on the shareholder return policy and stock performance going forward. We maintain BUY and our target price of KRW80,000.

Underlying
Hyundai Steel Company

Hyundai Steel is engaged in the manufacture and distribution of steel products. Co.'s products are reinforcing bars, wide flange beams, H shaped steel, structural tees, steel-deformed bars and piles. Co. also manufactures stainless steel sheets and coils, including cold rolled stainless steel sheets, hot rolled steels, coils and other steel casting products.

Provider
Hyundai Motor Investment & Securities
Hyundai Motor Investment & Securities

Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc. 

Analysts
Hyun Wook Park

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