Shinhan Securities Raises HL Mando Target Price to 77,000 Won, Highlights Robot Orders

Shinhan Investment Corp. maintained a "buy" rating on HL Mando and raised its target price by 16.7% to 77,000 won on July 2.

Park Kwang-rae, an analyst at Shinhan Investment, stated that the stock's reevaluation hinges on improvements in the electronic chassis mix, the expansion of robot taxi references, and confirmation of requests for quotes (RFQs) for humanoid actuators. He emphasized that the success of robot business orders after 2027 will be a key variable.

Despite a slowdown in demand, the company's second-quarter performance is expected to remain stable. Operating profit for the second quarter is projected to be 100.7 billion won, a 3.3% decrease from the previous year, but in line with market expectations of 104.3 billion won. While rising memory semiconductor prices and logistics and raw material costs pose challenges, recovery in production from major clients, the impact of the NIO ES8, increased orders from Tata in India, and stable volumes from Volkswagen in Europe are expected to offset these factors.

Clemove sources semiconductors and Mobileye chips in dollars, while its revenues are primarily in won and local currencies, making it significantly affected by the won's depreciation. However, if some exchange rate compensations are reflected in the second quarter, it could help alleviate cost burdens in the Advanced Driver Assistance Systems (ADAS) sector.

The key to defending 2026 performance lies in IDB2. This year, integrated electronic brake (IDB) sales are expected to increase by about 15%, with IDB2 being recognized as a core electronic braking system due to the spread of electric vehicles, hybrids, ADAS, and Software-Defined Vehicles (SDVs). Analysts note that the significance lies more in product mix improvement and profitability defense than in simple revenue growth.

If North American IDB2 mass production expands, HMGMA operating rates increase, and local customers for SDVs in China are confirmed, the company could be reevaluated from a traditional chassis parts supplier to a provider of electronic motion control components. Operating profit for 2026 is forecasted to rise by 10.7% to 395.2 billion won.

From a valuation perspective, the target price was raised by applying a target price-to-earnings ratio (PER) of 21 times. The humanoid actuator business is expected to reach a critical turning point with RFQs in 2027, and the North American actuator market is likely to respond to RFQs next year. Following the confirmation of bidding results in 2027, the value of the robot business is expected to be reflected in a sum-of-the-parts (SOTP) analysis.