[Alphabiz=(Chicago) Reporter Kim Jisun] Meritz Securities lowered its target stock price from 85,000 won to 70,000 won on the 19th, saying Hyundai Wia's performance in the machinery sector is weaker than expected and its difficult business environment is expected to continue for the time being.

Meritz Securities predicted that Hyundai Wia's operating profit in the fourth quarter of last year would be 55.3 billion won, which is about 12% below market expectations.

Meritz Securities pointed out, "The problem is worsening profitability in the machinery sector."

Hyundai Wia's machinery sector continued to suffer losses for five years from 2017, but posted a surplus for three consecutive quarters last year through high-intensity manpower restructuring conducted in 2021.

Meritz Securities, however, said, "It is inevitable to record losses in the fourth quarter of last year due to sharp sluggish demand and intensifying competition in the front industry," and predicted, "The difficult business environment in the machinery sector will continue this year."

Meritz Securities said, "The growth of demand for general-purpose machinery due to weak investment in front industries will slow down and the profitability of the machinery business will continue to be sluggish due to intensifying competition for orders," and predicted, "The external growth of the auto parts sector will also decrease."

Meritz Securities, however, maintained Hyundai Wia's investment opinion as a 'buy'.

 

 

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