Hyundai AutoEver (307950) Q1 2026 Earnings Review and Valuation Analysis
Hyundai AutoEver (307950) is a specialized IT services affiliate of Hyundai Motor Group, with enterprise IT (SI·ITO) and automotive software as its two core business pillars. Q1 2026 revenue reached KRW 935.7B (≈$621.3M), up +12.3% YoY — a record high on a quarterly basis — but operating profit came in at KRW 21.2B (≈$14.1M), down -20.7%, weighed down by rising upfront R&D costs and approximately KRW 20.0B (≈$13.3M) in revenue deferrals. The group's next-generation ERP transition cycle (~2028) and SDV strategy are reshaping the medium-term revenue structure.
1. Business Overview and Core Operations
Hyundai AutoEver is an IT services affiliate of Hyundai Motor Group, with Hyundai Motor (and 5 others) holding a combined stake of 75.3%. The company's business segments are divided into Enterprise IT — comprising System Integration (SI) and IT Outsourcing (ITO) — and Automotive SW. On a consolidated basis for FY2025, it recorded revenue of KRW 4.252 trillion (≈$2.8B) and operating profit of KRW 255 billion (≈$169.3M) (OPM 6.0%). Total shares outstanding are 27.42 million, and based on the May 19, 2026 closing price of KRW 558,000 (≈$370.5), market capitalization stands at approximately KRW 15.30 trillion (≈$10.2B). Foreign ownership is approximately 2.07%, with the captive group affiliate structure remaining dominant.
📌 FY2025 revenue KRW 4.252 trillion (≈$2.8B) · OPM 6.0%, stable captive structure with 75.3% group shareholding
2. Core Product Competitiveness Analysis
In the Enterprise IT segment, the group-wide next-generation ERP migration (ongoing through 2028) and cloud transition are intersecting, driving Q1 2026 SI revenue growth of +19.1% and cloud revenue growth of +70% (year-over-year)*1. ERP revenue also sustained high growth at +64% YoY. In the Automotive SW segment, costs from the next-generation navigation platform transition and SDV advance R&D were absorbed into cost of goods sold, causing Q1 GPM to fall to 9.7% — down 4.4 pp from 14.1% in the prior-year period. GPM improvement is expected from Q3 as the next-generation navigation SW enters mass production*2.
| Category | Details |
|---|---|
| Position | Hyundai Motor Group captive IT partner — integrated supplier of SI, cloud, and Automotive SW |
| Competitive Advantage | Beneficiary of group ERP and cloud migration — cloud revenue YoY +70%*1, ERP YoY +64%*1 |
| Competitive Disadvantage | Short-term GPM decline in Automotive SW — 9.7% in Q1 2026 (down 4.4 pp from 14.1% in the prior-year period) |
3. Valuation Analysis
Based on the closing price of KRW 558,000 (≈$370.5) on May 19, 2026, the Trailing PER stands at 83.9x and the Forward PER at 73.0x. DS Investment Securities applied a target PER of 51.4x — a 30% premium to the global peer average — to its 2027 projected controlling interest net income of KRW 282.0B (≈$187.3M), arriving at a target price of KRW 530,000 (≈$351.9) per share*3. Kyobo Securities derived a target price of KRW 540,000 (≈$358.6) per share*4 using a SOTP approach that adds the present value of new businesses — GPU & data center (KRW 105.5B, ≈$70.1M) and robotics (KRW 423.3B, ≈$281.0M) — to the core business value of KRW 892.3B (≈$592.4M). The current share price of KRW 558,000 (≈$370.5) is 3.3% above the higher of the two brokerages' target prices (KRW 540,000, ≈$358.6).
📌 Current price KRW 558,000 (≈$370.5) — 3.3% above the top broker target price of KRW 540,000 (≈$358.6); Forward PER 73.0x
| Metric | Current | Reference | Interpretation |
|---|---|---|---|
| Trailing PER | 83.9x | - | Based on Naver Finance (2026-05-19) |
| Forward PER | 73.0x | Peer avg. 58.3x*3 | 2026F basis; premium to peers |
| PBR | 8.28x | - | Based on Naver Finance (2026-05-19) |
| Broker Target Price Range | KRW 530,000–540,000 (≈$351.9–$358.6) | - | DS Investment Securities & Kyobo Securities estimates*3*4 |
4. Risk & Monitoring Points
A delay in the recovery of automotive SW GPM, recurring deferral of enterprise IT revenue, and a structural rise in the SG&A ratio (forecast at 4.8% for FY26F*2) are near-term profitability variables. Changes to the SDV mass-production schedule and shifts in the pace of the group's new business initiatives could affect medium-term earnings estimates.
- ⚠️ Automotive SW GPM recovery delay — If the next-generation navigation SW 3Q26 mass-production schedule is revised, profitability pressure persists
- ⚠️ Structural rise in SG&A ratio — Cloud usage fees and rental costs rising in tandem; FY26F SG&A ratio forecast at 4.8%*2
- 📌 Automotive SW GPM — Monitor recovery pace from the current 9.7% level from 2Q26 onward; 2Q26F target 10.5%*2
- 📌 Enterprise IT Q2 revenue — Whether the deferred KRW 20.0B (≈$13.3M) contract is recognized (2Q26F consensus approx. KRW 1.167T, ≈$774.8M*3)
5. Recent DART Filings
As of the analysis date (2026-05-20), no new DART filings with high relevance to the subject of this report have been identified.
Hyundai AutoEver is at a stage where medium-term growth drivers — the group's ERP and cloud transition — coexist with near-term profitability headwinds in automotive software. The key monitoring variable is the extent to which the Forward PER of 73.0x already prices in the medium-term growth scenario.
📎 References & Estimation Basis
- *1 Kyobo Securities and DS Investment & Securities Research Center estimates (as of 2026-05-06) — Q1 2026 cloud revenue YoY +70% and ERP revenue YoY +64% are broker quarterly segment estimates based on company-disclosed earnings
- *2 DS Investment & Securities and Kyobo Securities Research Center estimates (as of 2026-05-06) — next-generation navigation SW mass-production rollout scheduled for Q3 2026, Q2 2026F automotive SW GPM of 10.5%, FY2026F SG&A ratio of 4.8% (+0.3%p YoY)
- *3 DS Investment & Securities Research Center estimates (as of 2026-05-06) — FY2027F controlling interest net profit of KRW 282.0B (≈$187.3M); target price KRW 530,000 (≈$352) per share based on a 30% premium over the global peer average FY2027F PER of 39.5x (target PER 51.4x). The peer average FY2026F PER of 58.3x is per the Peer Group Valuation table in the same report.
- *4 Kyobo Securities Research Center estimates (as of 2026-05-06) — SOTP: existing business value of KRW 8,923B (≈$5.9B) (Target P/E 33.8x × FY2027F controlling interest net profit of KRW 264B (≈$175.3M)) + GPU & data center present value of KRW 1,055B (≈$700.4M) + robotics present value of KRW 4,233B (≈$2.8B); target price KRW 540,000 (≈$359) per share
- *5 USD equivalents (≈$) are approximate, calculated at 1 USD = 1,506 KRW (as of 2026-05-20, source: Yahoo Finance).
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