Hyundai Robotics (2018.1.19) - SOTP fair value analysis of holding company

We will analyze the fair value of Hyundai Robotics, the holding company of Hyundai Heavy Industries Group.

After the oil price plunge in 2014, the company's annual stock price, which stood at 500,000 won per unit deficit, stood at 100,000 won. Shareholders who invested in Hyundai Heavy Industries are likely to have had a lot of heartburn. Since then, HyunJoong Group has been transformed into a holding company through re-listing in the last year. We expect Hyundai Robotics, the holding company of the holding company, to see the current share price after listing Hyundai Oilbank IPO in 2H11 after the re-listing.

Through the re-listing, Hyundai Heavy Industries Group
It is divided and it is re-listed in KOSPI.

Hyundai Robotics (holding company) Hyundai Heavy Industries Hyundai Electric Hyundai Construction Machinery

Among the four companies, Hyundai Robotics is the holding company that needs to be noticed the most.
The reason is that

Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Robotics subsidiary Hyundai Global Service 100% ownership )

These three issues are central. First, Chairman Chung's share increased to 25%.
The valuation of Hyundai Oilbank's stake is revalued.
We must pay attention to the potential growth potential of subsidiary Hyundai Global Services.

So in detail, in earnest,
Let's analyze the value of Hyundai Robotics after listing Hyundai Oilbank.

[Hyundai Robotics stakeholder structure]

Hyundai Robotics Robotics Business Company Value Hyundai Oilbank 91% Ownership Hyundai Global Service 100% Ownership Hyundai Heavy Industries 27.80% Ownership Hyundai E & C 35.60% Hyundai E & C 32.10% Ownership Borrowings 1.77 trillion

[Robot Business]
For the mainstay robot business, cumulative 1Q ~ 3Q operating profit of KRW 12 billion
If we multiply the figure by a multiple of 7x, we will generate a fair value of KRW112.6bn.

[Value of Hyundai Oilbank stake]
As of Jan 18, Hyundai Oilbank's share price is 40,750 and its market capitalization is 9.98 trillion won.
Hyundai Oilbank's net profit is expected to reach W900bn last year, so the market cap of 10 trillion won
PER of 11x, which is the same level as S-OIL.

Hyundai Robotics owns 91.10% of Oilbank.
Assuming that 41.10% of the shares are listed and 50% are held
When listed on 41.10%, dividing the value of 4.1 trillion shares by 22%, the capital amount will be 3.2 trillion won.
The remaining 50.00% stake value is reflected as a 3.5 trillion stake value with a 70% discount from 4.99 trillion won.
In other words, the market capitalization of Hyundai Robotics is 6.7 trillion won.

[Hyundai Heavy Machinary]
The current share price is KRW134,500, which is based on 69,165,426 shares
27.3% of the 9.3 trillion won, 70% of the 2.5 trillion won, 1.81 trillion worth of stake is reflected.

[Hyundai Electric]
Reflecting the value of 294.2 billion shares in the same way

[Hyundai Construction Machinery]
Reflecting the value of equity holdings of KRW420.5b in the same way

[Hyundai Global Service]
When analyzing the value of Hyundai Robotics holding company along with Hyundai Oilbank
The most important point is this wholly owned subsidiary Hyundai Global Service.
The holding company owns 100% of the stake.
Since Hyundai Heavy Industries Group is doing maintenance work on the entire ship ordered
It is a wholly-owned subsidiary that is responsible for the internal workings of the group companies and produces high operating profits.
Cumulative operating profit by global service of 3Q 2017 is 52.7 billion

If we add a conservative multiple of 7x to the operating profit of W70.2bn,
It is about 491.6 billion won. Some analysts estimate that the growth value of Hyundai Global Services is expected to reach W2trn. However, as it is an individual investor rather than a commission-based securities analyst, it should be conservatively estimated as a fair value rather than a target price. Of the total.

Now, dividing the value of the equity and the value of the company so far and dividing by the number of shares, the fair value is calculated.

Oh, you missed one thing. Subtract 1.77 trillion of borrowings of holding company.

Yes. So let's add up to 1.77 trillion.


Hyundai Robotics: KRW 112.6 billion Hyundai Heavy Industries: KRW 1.81 Hyundai Electric: KRW 294.2 billion Hyundai E & C: KRW 420.0 billion Hyundai Oilbank: 6.7 trillion Hyundai Global Services: KRW 344.1 billion Borrowings: -1.77 trillion won

Hyundai Robotics's conservative view is that the fair market is at 7.9 trillion won
The fair value is calculated based on a fair value of KRW485,000.

Given that Hyundai Robotics' stock price on January 18, 2018 is KRW 433,000
It seems that there is more than 50,000 won upside possibility than the possibility of falling.
Of course, my analysis shows that the company's operating profits are 10 times, 20 times more
The target price of securities analysts applying the potential value of global services to W2trn
This is a very low analysis.

Put multiple robots in business 15 times
Putting the potential value of global services at 2 trillion won
Over 600,000 won. Securities price target seems to be unlikely at all to reach 600,000 won.

Hyundai Oilbank stake worth W7trn
From now on, when we look at Hyundai Robotics 'stock price, Hyundai Oilbank'
After listing, it is necessary to pay close attention to the oil market's market cap and the oil refining industry.

If the oil refining industry is not good, it is a direct hit from Hyundai Robotics.
Conversely, if the oil industry continues to be as good as it is now and is listed as such
Hyundai Robotics shares are currently trading at a conservative SOTP share price
At least we can not go up to more than 480,000 won.