Hyundai Glovis: Beneficiary of Global Logistics Disruption
Maintain BUY; Raise TP by 4.0% to KRW260,000
We maintain BUY on Hyundai Glovis as we have raised our TP by 4.0% to KRW260,000 (a 30.7% upside to the Jul 20 closing price). We revised up our 2021E OP forecast by 7.1%. Derived using the discounted cash flow model (7.0% WACC; 2.2% TGR), TP equates to 14.3x 12m fwd P/E and 1.66x P/B.
2Q21E OP of KRW254.7bn (+95.0% YoY), 5.7% above consensus
We lifted our 2Q21E OP estimate by 13.1% (KRW29.5bn) to KRW254.7bn, which is 5.7% (KRW13.7bn) above consensus and equates to 95.0% (KRW124.1bn) YoY growth. We revised up our outlook as the company benefits from disruptions in global logistics in 2Q21 in the aftermath of the Suez Canal blockage at end-March. The incident has aggravated shipping bottlenecks on major maritime routes. As a result, shippers that had failed to secure freight vessels appear to have resorted to more expensive air cargo. Increased demand to expedite freight shippin