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THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
economy-ss-8
Inflation Update: Weak demand softens shocks
July 4, 2025 DOWNLOAD
948 x 535 px AdobeStock_433552847
Economic Updates
Monthly Economic Update: Fed cuts incoming   
June 30, 2025 DOWNLOAD
equities-3may23-2
Consensus Pricing
Consensus Pricing – June 2025
June 25, 2025 DOWNLOAD
View all Reports
Bonds Market Movements Top Picks Issuer List
  • Top Picks
  • Hyundai Motor
Corporate Bonds

Hyundai Motor

  • Sector: Manufacturing
  • Sub Sector: Automotive
  • Country: Korea
  • Bond: HYNMTR 5.1 30
  • Indicative Yield-to-Maturity (YTM): 4.83%
  • Credit Rating : A3 / A- / A-
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Fundamental View

AS OF 22 May 2025
 
  • Hyundai Motor Group posted solid 1Q25 results and maintained its FY25 sales and consolidated operating profit guidance. While we continue to expect lower FY25 automotive profitability owing to tariff impacts on its US vehicle sales, which account for 25% of its global unit sales, we expect the tariff headwind to be partially offset by favorable currency and higher financial services profitability along with support by the South Korean government for the automotive sector. We expect these tariff mitigation factors to alleviate our previous concerns regarding potential negative rating actions.
 

Business Description

AS OF 22 May 2025
  • Hyundai Motor Co., Ltd. engages in the manufacture and distribution of motor vehicles and parts. It operates through the following business areas: Vehicle, Financial and Other. The Vehicle division offers motor vehicles. The Financial division provides financing, leasing and credit cards. The Other division includes manufacture of railways. The company was founded on December 29, 1967, and is headquartered in Seoul, South Korea.
  • Hyundai Capital America benefits from a support agreement with Hyundai Motor (HMC). HCA investor relations confirmed its support (keepwell) agreement contains a fixed charge coverage provision that it views as particularly strong compared to other peers.

Risk & Catalysts

AS OF 22 May 2025
  • Hyundai and Kia both maintained FY25 sales and consolidated operating profit guidance – which did not include the potential impact of tariffs – citing both uncertainty surrounding tariff implementation, especially for USMCA-compliant parts, and strategies to mitigate the tariff impact. Both companies called out the likelihood of price increases to mitigate the tariff impact, while Hyundai management highlighted additional mitigation strategies in their earnings conference call. On a combined basis, the Hyundai Motor Group (HMG) targets FY25 wholesale unit growth of 2% to 7.4 mn units, revenue growth of 5% to 6%, and a consolidated operating profit margin of 8.8% at the midpoint of the range for YoY margin contraction of 40 bp.
  • The company’s FY25 consolidated operating profit could also benefit from higher captive finance profit and favorable currency impacts related to the weak Korean won, two factors that boosted its 1Q25 profit. The South Korean government announced emergency support for the auto sector, including financial aid and tax cuts to mitigate the impact of US tariffs on imported vehicles.

Key Metric

AS OF 22 May 2025
KRW bn FY21 FY22 FY23 FY24 LTM 1Q25
Revenue 94,143 113,718 130,150 136,725 139,725
EBIT 5,459 8,950 15,440 14,189 13,945
EBIT Margin 5.8% 7.9% 11.9% 10.4% 10.5%
EBITDA 10,015 13,998 20,387 18,476 18,237
EBITDA Margin 10.6% 12.3% 15.7% 13.5% 13.9%
Total Liquidity 19,745 26,639 26,507 27,488 23,397
Net Debt (5,202) (11,035) (10,916) (11,799) (15,252)
Total Debt 12,569 12,940 12,940 12,940 5,805
Gross Leverage 1.3x 0.9x 0.6x 0.7x 0.3x
Net Leverage -0.5x -0.8x -0.5x -0.6x -0.8x
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CreditSight View Comment

AS OF 03 Jul 2025

We upgrade our recommendation on notes of Hyundai Capital America (HYNMTR), Hyundai Capital Services (HYUCAP), and Kia Corp. (KIA) to Outperform from Market perform based on our view the company’s tariff mitigation strategies, its financial services and currency tailwinds, and South Korean automotive sector emergency aid initiatives should help support the company’s profit outlook and enable it to avoid credit rating downgrades. Our recommendation is based on relative value, its geographic diversification, increasing innovative hybrid and EV offerings, and its solid brand positioning within the affordable vehicle category.

Recommendation Reviewed: July 03, 2025

Recommendation Changed: April 28, 2025

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