---
endpoint: analytics
pattern: Autos
status: done
latency_ms: 180626
conversation_id: 19f0a319-7492-4c50-9f89-6a34d5b88b4e
citations: 0
created: 2026-05-31 19:09:10Z
---

# How does Hyundai Motor’s valuation compare to peers, and what justifies its premium/discount?

# Hyundai Motor (005380 KS) — Valuation vs Peers

## Headline view

Hyundai Motor (HMC) trades at one of the **deepest discounts in the global auto universe** — and CLSA's framing is that the discount is unjustified given HMC's superior earnings profile, BEV positioning, and shareholder returns. The discount is structural (Korea-autos overhang + tariff risk) rather than fundamental.

CLSA values HMC at **6.0x one-year forward P/E** — "in line with the higher end of the average range for global legacy OEMs … we see no reason why Hyundai Motor should trade at a discount given its better earnings and BEV market share profiles" [3]. Kia, by contrast, is valued at **5.0x (a 17.5% discount to HMC)**, reflecting HMC's higher total shareholder return (~35% vs Kia's ~30%) [4].

---

## The peer comp table (CLSA Figure 22, 1 April 2025)

| Company | Mkt cap (US$mn) | PER 2025 | PER 2026 | PBR 2025 | ROE 2025 (%) | EV/EBITDA 2025 |
|---|---|---|---|---|---|---|
| **Hyundai Motor (005380 KS)** | **28,254** | **5.1x** | **4.5x** | **0.5x** | **9.4** | **6.8x** |
| **Kia (000270 KS)** | 25,192 | 4.5x | 4.4x | 0.6x | 14.1 | (0.6x) |
| Korea avg | — | 4.8x | 4.5x | 0.5x | 11.8 | 3.1x |
| Toyota (7203 JP) | 277,195 | 7.8x | 8.2x | 0.9x | 12.8 | 11.0x |
| Honda (7267 JP) | 47,379 | 6.3x | 5.9x | 0.5x | 7.7 | 6.3x |
| Suzuki (7269 JP) | 23,933 | 9.2x | 8.8x | 1.2x | 14.2 | 4.7x |
| Subaru (7270 JP) | 12,985 | 5.7x | 6.5x | 0.7x | 13.0 | 2.2x |
| Japan avg | — | 6.9x | 7.7x | 0.7x | 9.1 | 6.3x |
| Ford (F US) | 39,885 | 7.4x | 6.3x | 0.9x | 10.6 | 2.7x |
| GM (GM US) | 46,795 | 4.3x | 4.0x | 0.7x | 16.7 | 2.1x |
| US avg (ex-Tesla) | — | 5.8x | 5.2x | 0.8x | 13.7 | 2.4x |
| Tesla (TSLA US) | 833,593 | 95.1x | 68.7x | 10.7x | 10.9 | 47.6x |
| Daimler (MBG GR) | 56,510 | 6.5x | 5.7x | 0.5x | 8.2 | 1.1x |
| BMW (BMW GR) | 50,772 | 6.3x | 5.7x | 0.5x | 8.1 | 3.6x |
| Volkswagen (VOW GR) | 51,480 | 4.0x | 3.5x | 0.3x | 6.4 | 0.9x |
| Renault (RNO FP) | 14,875 | 4.8x | 4.3x | 0.4x | 7.8 | 0.9x |
| Volvo (VOLVB SS) | 59,465 | 11.9x | 11.0x | 2.9x | 24.6 | 6.1x |
| Europe avg | — | 6.7x | 6.0x | 0.9x | 11.0 | 2.5x |
| Great Wall (2333 HK) | 26,188 | 7.7x | 6.8x | 1.2x | 16.4 | 7.3x |
| Geely (175 HK) | 21,472 | 11.2x | 9.0x | 1.5x | 14.1 | 5.3x |
| SAIC (600104 CH) | 25,084 | 16.7x | 13.7x | 0.6x | 3.7 | 5.8x |
| China avg | — | 19.4x | 11.8x | 0.8x | 7.8 | 5.2x |
| **Global avg** | — | **13.3x** | **10.3x** | **1.2x** | **10.2** | **6.5x** |

Source: CLSA Figure 22, 1 April 2025 [1].

On Bloomberg 12-month-forward consensus (CLSA Figure 18, 23 March 2025), the gap is even starker [6]:

| Company | 12F P/E |
|---|---|
| Nissan | 21.2x |
| Toyota | 8.7x |
| Ford | 7.1x |
| Subaru | 7.0x |
| Daimler | 6.7x |
| BMW | 6.6x |
| Honda | 6.6x |
| Stellantis | 4.8x |
| GM | 4.4x |
| VW | 4.2x |
| **HMC** | **3.9x** |
| **Kia** | **3.7x** |

HMC is the **second-cheapest legacy OEM globally on forward P/E**, only beaten by its own sister-brand Kia.

P/B confirms the discount but less dramatically [8]:

| Company | 12F P/B |
|---|---|
| Toyota | 1.0x |
| Ford | 0.9x |
| Subaru | 0.7x |
| GM | 0.7x |
| Kia | 0.6x |
| Daimler | 0.6x |
| BMW | 0.5x |
| Honda | 0.5x |
| **HMC** | **0.5x** |
| Stellantis | 0.4x |
| VW | 0.3x |
| Nissan | 0.3x |

---

## What justifies the discount — and what doesn't

### Sector-level discount (mostly structural, not HMC-specific)

Within Korea, autos are the **single cheapest sector**, trading at 3.9x 12F P/E versus Tech at 8.7x, Transformers at 15.1x, Defense at 19.5x, Shipbuilding at 20.2x and Healthcare at 54.2x [5]. So a large share of HMC's discount is "guilt by sector association" inside the KOSPI rather than anything specific to HMC's franchise quality.

Globally, CLSA frames the discount as: *"global automakers' valuations are trading at a hefty discount mainly due to peak-out concern and a competitive xEV landscape"* [2]. Every legacy OEM is being marked down for cycle-peak earnings risk plus the EV transition; HMC is caught in the same de-rating.

### Fundamentals — HMC's profile argues against the discount

| Metric | HMC | Korea avg | Global avg | Read |
|---|---|---|---|---|
| 2025E OPM | 8% | — | mid-single-digit (Stellantis 5%, Ford 4%, GM 8%, BMW 8%, Tesla 8%, VW 6%, Honda 7%, Nissan 1%) | HMC OPM is **at or above most legacy OEMs**, only Toyota (10%) and Subaru (9%) sit higher [7]. |
| 2025E ROE | 9.4% | 11.8% | 10.2% | HMC's ROE is below Korea (Kia is the puller at 14.1%) but in line with global average and well above BMW (8.1%), Daimler (8.2%), VW (6.4%), Honda (7.7%) [1]. |
| 12F dividend yield | 6.3% | — | — | Among the top tier globally (Kia 6.9%, VW 6.7%, Ford 6.6%, Daimler 6.6%, Stellantis 6.5%, HMC 6.3%) [9]. |
| Total shareholder return (incl. buybacks) | ~7–9% | — | — | Yield-plus-buyback support is one of CLSA's core arguments for limited downside [2]. |

CLSA's investment thesis is direct: *"fundamentally HMC is in a much better position than other global OEMs … we do not see meaningful downside despite consensus being too low because the yield on HMC from dividends and buybacks is close to 7-9% (depending on buyback assumption)"* [2].

### Why HMC trades cheap despite the fundamentals

The real overhang is policy/geographic, not operational:

1. **US tariff risk.** A 25% US auto-import tariff was approved 26 March 2025 and is the single biggest variable in HMC's TP risk model. CLSA bakes in a less-severe outcome but explicitly flags downside if the 25% rate sticks, if US auto demand drops more than 1–2%, or if KRW/USD prints stronger than the ₩1,300 assumption [1].
2. **Korea-discount + cyclical-peak fear.** Forward earnings are near cycle highs; the market is unwilling to pay normal multiples on what it views as peak-of-cycle EPS.
3. **xEV competitive pressure.** Chinese OEMs (BYD, Geely, Xiaomi) and Tesla have steepened the discount applied to legacy ICE-heavy OEMs, even though HMC's BEV market-share profile (Ioniq 5/6, Kia EV9) is among the better in the legacy cohort.

### Why the discount narrows vs Kia (sister-stock benchmark)

HMC trades at a **premium to Kia** within the Korea cluster on P/E (5.1x vs 4.5x 2025E) — even though Kia has a higher ROE (14.1% vs 9.4%) and higher dividend yield (6.9% vs 6.3%). CLSA explains the relative premium by pointing to HMC's **higher total shareholder return (~35% vs Kia's ~30%)**, more diversified revenue (Genesis luxury brand, financial services unit), and a stronger SDV/BEV product roadmap [4]. The Kia/HMC discount has historically run at ~10% but has recently widened to 17.5% as HMC's buyback program ramps.

---

## Synthesis — what justifies HMC's "premium/discount"

| Question | Answer |
|---|---|
| Premium vs **Kia / Korea avg**? | Yes, ~5–10% premium on P/E. Justified by higher TSR (~35%), Genesis brand, broader product mix, larger buyback program [4]. |
| Premium vs **Volkswagen / Renault / Stellantis**? | Marginal premium (5.1x vs 4.0x/4.8x). Justified by ROE (9.4% vs VW 6.4% / RNO 7.8%) and better BEV positioning. |
| Discount vs **Toyota / Honda / Suzuki / Tesla**? | Yes — 25–35% discount to Japan avg (6.9x); >90% discount to Tesla. Driven by (a) cycle-peak EPS perception, (b) US tariff overhang, (c) Korea sector discount, (d) lower brand premium than Toyota. **Not** justified on profitability or balance sheet metrics. |
| Vs **Chinese OEMs**? | HMC trades at ~50–80% discount to the China avg P/E (3.9x vs 19.4x), but here the comparison is misleading — China multiples are inflated by EV-pure-play growth names (Geely 11.2x, BYD); on ROE HMC (9.4%) is broadly comparable with the Chinese legacy cohort. |

**Bottom line**: HMC's absolute valuation (3.9x–5.1x forward P/E, 0.5x P/B, ~6% dividend yield) is in the bottom quintile of global autos. CLSA's view — and the data supports it — is that **the discount is not justified by fundamentals** (ROE, OPM, BEV mix, balance sheet, capital-return yield), but is being driven by a sector-wide cycle-peak fear, the Korea-autos discount, and US tariff overhang. The 6.0x target multiple [3] implies the discount narrows as those macro/policy overhangs clear, not as HMC's earnings inflect.

---
**Sources**

[1] Korea autos (Warming up for a counter-trend rally) — CLSA, 1 April 2025 — Figure 22 Global autos peer comps — 607954715LinqAlpha.PDF
[2] Korea autos (Warming up for a counter-trend rally) — CLSA, 1 April 2025 — Investment thesis HMC — 607954715LinqAlpha.PDF
[3] Korea autos (Warming up for a counter-trend rally) — CLSA, 1 April 2025 — Valuation details HMC (6.0x target) — 607954715LinqAlpha.PDF
[4] Korea autos (Warming up for a counter-trend rally) — CLSA, 1 April 2025 — Kia valuation (17.5% discount to HMC) — 607954715LinqAlpha.PDF
[5] Korea autos (Counter-trend rally pt.2) — CLSA, 23 March 2025 — Korea sector 12F P/E table (Autos 3.9x) — 607953685LinqAlpha.PDF
[6] Korea autos (Counter-trend rally pt.2) — CLSA, 23 March 2025 — Global OEM 12F P/E peer table — 607953685LinqAlpha.PDF
[7] Korea autos (Counter-trend rally pt.2) — CLSA, 23 March 2025 — 2024/2025 OPM peer table — 607953685LinqAlpha.PDF
[8] Korea autos (Counter-trend rally pt.2) — CLSA, 23 March 2025 — Global OEM 12F P/B peer table — 607953685LinqAlpha.PDF
[9] Korea autos (Counter-trend rally pt.2) — CLSA, 23 March 2025 — Global OEM 12F dividend yield peer table — 607953685LinqAlpha.PDF

