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Hyundai: On The Road To Leadership In Future Mobility

Oct. 02, 2020 1:27 PM ETHyundai Motor Co., Ltd. (HYMLF)2 Comments


  • While Nikola is rolling trucks downhill, Hyundai Motor is already delivering hydrogen-powered trucks.
  • Vehicle electrification and mobility innovation allows the company to differentiate its brands from the rest of the traditional OEMs.
  • Higher market share in SUVs and luxury vehicles will provide a tailwind for profitability.
  • Low leverage gives Hyundai the opportunity to continue to invest at times when peers cut costs and scale back production.

Hyundai concept 45

Source: evcentral.com

Hyundai Motor Company (OTCPK:HYMLF) has been among the best performing auto manufacturers since I last wrote about it in July, explaining why the company could benefit massively from disruption trends in the industry.

Since I wrote my thesis, the stock has appreciated by more than 40%, compared to 24% appreciation of First Trust Global Auto ETF (CARZ).

ChartData by YCharts

Although the price appreciation was rather extreme over the last few months, and risks for the global economy and auto industry remain extremely high, it might not be the best time to accumulate stock if investment horizon is less than a year. However, as I will show below, the stock remains attractive on a long-term basis as Hyundai's management is firing on all cylinders and positioning the company to be among the future leaders in mobility.

Firing on all cylinders

Similar to General Motors (GM), Hyundai is executing well in all areas of future mobility - fuel cells, electrification, autonomous driving, and Mobility as a Service (MaaS) platforms.

To begin with, Hyundai is among the OEMs that believe hydrogen has an important role to play in future of transportation, even though it is not as exciting as batteries at the moment.

Source: Hyundai Investor Presentation

Not only does the company's management believe in the future of hydrogen and fuel cells, but it is already one of the world's leaders in the space. While Nikola (NKLA) is rolling truck downhills, Hyundai is already shipping its first fuel cell-powered trucks to Switzerland, with the aim to capture the massive European market.

Hyundai Motor Company on Sunday said the first 10 Hyundai XCIENT Fuel Cells, the world’s first mass-produced fuel cell heavy-duty truck, were on their way to Switzerland.

Source: fuelcelltrucks.eu

Source: hyundai-hm.com

By the end of the year, Hyundai expects

This article was written by

Vladimir Dimitrov, CFA profile picture
Investment strategy for those seeking steady and above-market returns

Vladimir Dimitrov is a former strategy consultant with a professional focus on business and intangible assets valuation. His professional background lies in solving complex business problems through the lens of overall business strategy and various valuation and financial modelling techniques.

Vladimir has also been exploring the concept of value investing and in particular finding companies with sustainable competitive advantages that also trade below their intrinsic value. He supplements his bottom-up approach with a more holistic view of the markets through factor investing techniques.

Vladimir made his first investment in farmland right out of high school in 2007 and consequently started investing through mutual funds at the bottom of the market in 2009. In the years that followed he has been focused on developing his own investment philosophy and has been managing a concentrated equity portfolio since 2016. Vladimir is LSE Alumni and a CFA charterholder . 

All of Vladimir's content published on Seeking Alpha is for informational purposes only and should not be construed as investment advice. Always consult a licensed investment professional before making investment decisions.

Analyst’s Disclosure: I am/we are long GM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Please do your own due diligence and consult with your financial advisor, if you have one, before making any investment decisions. The author is not acting in an investment adviser capacity. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. The author recommends that potential and existing investors conduct thorough investment research of their own, including a detailed review of the companies' SEC filings. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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