---
endpoint: analytics
pattern: Autos
status: done
latency_ms: 213912
conversation_id: 5de31395-5968-446d-b982-78b6255ed7fe
citations: 0
created: 2026-05-31 19:14:28Z
---

# Is CLSA incrementally more positive/negative on Hyundai Motor. If so, why?

## CLSA on Hyundai Motor (005380 KS) — Incremental View

**Bottom line:** CLSA has been **directionally constructive but quantitatively unchanged** on Hyundai Motor (HMC). Rating has remained **Outperform (O-PF)** and target price **₩250,000** since November 2024, but the tone of CLSA's published commentary has become progressively **more positive on tactical risk/reward** through 1H25 — calling repeatedly for a "counter-trend rally" and arguing that tariff, peak-OPM and "existential" risks are over-priced. This is more of a **conviction reinforcement** than an incremental rating/TP upgrade.

### Rating & Target Price History — stable since the Nov 2024 re-upgrade

| Date | Rating | Target Price | Note |
|---|---|---|---|
| 16 Feb 2024 | BUY | ₩300,000 | Last "BUY" rating (Dohyoung Kim) [3] |
| 28 Jun 2024 | O-PF | ₩300,000 | Downgraded from BUY [3] |
| 15 Oct 2024 | HLD | ₩250,000 | Downgraded to Hold, TP cut [3] |
| **18 Nov 2024** | **O-PF** | **₩250,000** | **Restored to Outperform — current rating** [3] |
| 23 Jan 2025 | O-PF | ₩250,000 | Reiterated post-4Q24; "Mean reversion to the upside" [4] |
| 16 May 2025 | O-PF | ₩250,000 | Coverage transferred to Brian Lee; ratings/TPs maintained [1][2] |

→ **No formal upgrade since 18 Nov 2024.** Implied upside has actually **expanded** because the share price has fallen — from +23.2% upside in Feb 2025 (₩203,000 ref) [11] to **+29% upside** in May 2025 (₩193,800 ref) [1] — but this is mechanical, not from a TP hike.

### Why CLSA's tone is incrementally more positive (the qualitative arc)

**1. Valuation has reached "existential risk" extremes — viewed as excessive**
- HMC trading at **5.2x 1-yr fwd P/E with a 5.9% dividend yield** (Feb 2025 comp), making its multiple **lower than its dividend yield** — a signal CLSA interprets as the market "calling bluff on the yield or questioning sustainability of a business." CLSA explicitly rejects this. [12][11]
- **Combined dividend + buyback yield of ~8.9%** (₩13,500 implied DPS + ₩1.33tn buyback) provides a "strong buffer" and good risk/reward at ~5.4x P/E. [5][8]
- "We believe HMC and Kia are highly likely to fall into the relevant camp" of legacy OEMs with durable franchises. [12]

**2. Tariff overhang increasingly seen as priced-in, not a thesis-breaker**
- CLSA had already **baked-in a worst-case US tariff scenario in Nov 2024**, leaving EPS estimates 20% below consensus. Even on tariff-adjusted PE, HMC trades at a **20-25% discount to peers**. [10]
- After Trump's 26 Mar 25% auto tariff approval and the subsequent ~10% selloff, CLSA argued **"a prolboned 25% auto tariff would be too detrimental to the industry (10% inflation impact)"** and expected resolution at a lower rate — framing 2 April as a potential **"buy the news" event**. [16]
- Peer exposure to US tariffs is "equally exposed" given HMC's new Georgia plant; the disproportionate selloff in HMC is overdone. [10]

**3. Repeated "counter-trend rally" calls into 2Q25 — building conviction**
A sequence of bullish tactical notes through Feb–Apr 2025:
- **3 Feb 2025** — "PEs below dividend yields"; market pricing in existential risk that CLSA rejects. [12]
- **20 Feb 2025** — "If not now, when?" — HMC and Kia "price-in too much risk"; peak-OPM concern, tariff fears, and existential risk all viewed as priced to excess. [9]
- **16 Mar 2025** — "Counter-trend rally into April"; investment thesis: 7-9% combined yield from dividends and buybacks limits downside even if consensus is too optimistic. [13]
- **23 Mar 2025** — "Counter-trend rally pt.2"; HMC outperforming Kospi by 1.9ppts (vs. -13.5ppts YTD underperformance prior); explicit reiteration of Outperform; market typically bottoms when recession mindshare peaks. [14][15]
- **1 Apr 2025** — "Warming up for a counter-trend rally"; sentiment, positioning and fundamentals all primed for a rally. [16]

**4. Quality-of-franchise validation — software & strategic moves**
- HMC's 28 March SDV (software-defined vehicle) developer conference provided a more detailed roadmap. Deployment is slower than Tesla and select China OEMs, but CLSA flagged it as "noteworthy" — i.e., HMC is closing the tech gap. [18]
- HMC's **production alliance with General Motors** (announced ahead of the Feb 20 note) "further underscores the value merits of HKMC." [9]

**5. Newer thematic angles — hydrogen / FCEV optionality**
- The most recent CLSA reference to HMC (18 Jun 2025) highlights HMC's commitment to **producing 6,500 hydrogen fuel cells by 2028**, alongside BMW's 2028 FCEV launch target — flagging FCEV progress at auto OEMs as one of the three encouraging signals from CLSA's hydrogen webinar. [17]

### Caveats — what CLSA is NOT saying

- **Fundamentals are still mixed**, not improving. CLSA explicitly notes "conviction is not as high relative to 2H22 and 2H23 on fundamentals but in terms of sentiment it is a similar set-up." The bull case is **sentiment- and valuation-driven**, not earnings-driven. [15]
- **4Q24 missed consensus by 12%** and 2025 OP guidance was 10% below consensus, with the mid-point implying flat-ish OP. CLSA's view is that this is "priced in," not that earnings momentum is positive. [4][8]
- The base case is explicitly **"playing the range"** in 2025 — i.e., a trading thesis bracketed by 4-5x P/E support and ~6x target multiple, not a re-rating call. [4][6][7]
- **Coverage handover risk:** the new analyst (Brian Lee, took over 16 May 2025) has not yet published a fresh stand-alone HMC initiation note in the corpus — the May 2025 note simply transfers the existing ratings/TPs, so the qualitative pivot under Dohyoung Kim has not yet been independently revalidated. [1][2]

### Verdict

CLSA is **incrementally more positive on Hyundai Motor in tone but not in formal calls**:
- **Rating: unchanged** at O-PF (held since 18 Nov 2024) [3]
- **Target Price: unchanged** at ₩250,000 (held since 18 Nov 2024) [3]
- **Conviction: rising** — the cadence of bullish "counter-trend rally," "if not now, when?", "mean reversion to the upside" notes through Feb-Apr 2025 reflects an analyst increasingly confident that risk/reward is asymmetric to the upside [4][9][12][13][14][15][16]
- **Driver of the more constructive tone: valuation extremes** (PE below dividend yield, 8.9% total yield, 5.2x fwd PE vs. EU peers at 6-6.6x) and the view that **tariff/peak-OPM/existential risks are excessively priced-in** [10][11][12]
- **Latest data point (May 2025):** TP ₩250,000 vs. ₩193,800 = **+29% implied upside**, the widest upside since the Nov 2024 re-upgrade — making the unchanged O-PF stance functionally **more constructive** in light of the share-price reset [1]

The next genuine "incremental" datapoint to watch is Brian Lee's first stand-alone HMC research note under his coverage — that will reveal whether the new analyst maintains the Dohyoung Kim "play the range / counter-trend rally" framework or pivots to a different thesis.

---

**Sources**
[1] Korea autos (Transfer of coverage) — CLSA (16 May 2025) — 607959723LinqAlpha.PDF
[2] Korea autos (Transfer of coverage) — CLSA (16 May 2025) — 607959723LinqAlpha.PDF
[3] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[4] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[5] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[6] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[7] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[8] Hyundai Motor - O-PF (Mean reversion to the upside) — CLSA (23 Jan 2025) — 607948893LinqAlpha.PDF
[9] Korea Autos (If not now, when?) — CLSA (20 Feb 2025) — 607951218LinqAlpha.PDF
[10] Korea Autos (If not now, when?) — CLSA (20 Feb 2025) — 607951218LinqAlpha.PDF
[11] Korea Autos (If not now, when?) — CLSA (20 Feb 2025) — 607951218LinqAlpha.PDF
[12] Korea Autos (PEs below dividend yields) — CLSA (3 Feb 2025) — 607949551LinqAlpha.PDF
[13] Korea autos (Counter-trend rally into April) — CLSA (16 Mar 2025) — 607953152LinqAlpha.PDF
[14] Korea autos (Counter-trend rally pt.2) — CLSA (23 Mar 2025) — 607953685LinqAlpha.PDF
[15] Korea autos (Counter-trend rally pt.2) — CLSA (23 Mar 2025) — 607953685LinqAlpha.PDF
[16] Korea autos (Warming up for a counter-trend rally) — CLSA (1 Apr 2025) — 607954715LinqAlpha.PDF
[17] Global Energy (Building confidence) — CLSA (18 Jun 2025) — 607962290LinqAlpha.PDF
[18] Korea autos (Warming up for a counter-trend rally) — CLSA (1 Apr 2025) — 607954715LinqAlpha.PDF

