Hyundai Motor is new darling of the stock market

Hyundai Motor Group Executive Vice Chairman Euisun Chung briefs President Moon Jae-in about the company's hydrogen-powered vehicles in July. [YONHAP]

Investors are bullish on Hyundai Motor and its affiliates, betting that the group's sales will recover from the Covid-19 pandemic.

Hyundai Motor shares closed at 185,000 won ($159) Monday, up 2.21 percent from the previous trading day. That's a whopping 180 percent increase over March when the shares hit a low for the year of 65,900 won due to coronavirus jitters. It is 56 percent higher than in January, when the market had yet to be rattled by the coronavirus.

Hyundai Motor's market capitalization is now 39.5 trillion won, putting it after Samsung Electronics, SK hynix, Samsung Biologics, Naver and LG Chem on the country's main bourse.

It recovered its sixth rank after being pushed to No. 11 in May when internet companies including Kakao and Naver were hot and manufacturing companies not.

Investors are equally keen on 11 other publicly traded affiliates of the group including the smaller carmaker Kia Motors and parts maker Hyundai Mobis.

Kia Motors' shares closed at 48,450 won climbing by 1.36 percent on Monday compared to the previous trading day. That is also a more than 125 percent increase from March. Hyundai Mobis’ shares jumped 1.04 percent Monday compared to the previous trading day, closing at 242,500 — 125 percent higher than in March.

The combined market capitalization of Hyundai Motor and its 11 affiliates surpassed 100 trillion won, according to the Korea Exchange Monday, for the first time in 28 months. Its market cap was 100.2 trillion won Monday, a 121.5 percent increase compared to March.

“Stable domestic sales and a recovery in earnings after Covid-19 have lead to a bullish stock price of Hyundai Motor,” said Kwon Soon-woo, an auto analyst at SK Securities.

“New momentum in its hydrogen-powered vehicles also factored in.”

Hyundai Motor posted a 52 percent year-on-year drop in operating profit in the second quarter of this year, but SK Securities expects it to post a whopping 187 percent year-on-year jump in the third quarter backed by new car launches and cost controls.

Hyundai Motor is launching a number of models soon, including a fully revamped Tucson SUV and a brand new GV70 SUV from its premium Genesis brand.

Hyundai Motor’s progress in hydrogen-powered cars also helped the surging stock price.

In its latest conference call with analysts, Hyundai Motor said it will sell hydrogen trucks in the United States within the next two years. It also said it would expand the production of hydrogen-fueled vehicles to 40,000 units next year from the current 11,000 units. That figure will expand to 500,000 units by 2030, the carmaker said.

Brokerage houses are raising their target prices for the auto company's stock.

SK Securities increased the price from 120,000 won to 210,000 won per share. Shinhan Investment upped its estimate from 160,000 won to 250,000 won.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]