Hyundai Motor shares shed 60% from peak as earnings worries eclipse robot hype

"I was shocked when I checked the share price." — Hyundai Motor investor

"I envy Samsung Electronics and SK hynix — at least their earnings are holding up." — Hyundai Motor investor

Hyundai Motor's share price has been in freefall. Shares that once flirted with 800,000 won ($604) have collapsed into the 200,000-won range.

Not long ago, Hyundai Motor was drawing favorable comparisons to Samsung Electronics and SK hynix, buoyed by excitement over its physical AI and robot business. Now it is falling harder than either of them. Investors nursing heavy losses are growing increasingly anxious, and the company's third-quarter earnings are expected to disappoint as union strikes cut into shipments.

Hyundai Motor shares closed Friday down 2.82 percent at 293,000 won — a drop of roughly 60 percent from this year's peak.

The stock climbed above 500,000 won in January, moved into the 600,000-won range in February and the 700,000-won range in May, and reached 750,000 won in June.

The rally in the first half of the year was driven largely by expectations surrounding the company's robot business. Investors priced in hopes that Boston Dynamics, the US robotics firm owned by Hyundai Motor Group, would establish an early lead in the humanoid robot market and that deploying robots on production lines would lift productivity.

Within just a few months, however, concern about the core automaking business has come to outweigh enthusiasm for the robot venture.

The securities industry's third-quarter outlook is equally gloomy. According to FnGuide, analysts project Hyundai Motor's third-quarter sales at around 45 trillion won and operating profit at around 2.5 trillion won ($1.9 billion). While sales would edge up from 43 trillion won in the same period last year, operating profit is expected to fall by around 1 trillion won from the 3.58 trillion won recorded a year earlier.

Brokerages cited production disruptions from the union strike and rising raw-material costs as the main drags on third-quarter results.

Target prices for Hyundai Motor shares, which reached as high as 1.2 million won earlier this year, have been cut to as low as 410,000 won. KB Securities, which had set a 1.2 million-won target, lowered it to 700,000 won. NH Investment & Securities set its target at 540,000 won, while Yuanta Securities Korea went as low as 410,000 won.

The market expects Hyundai Motor's earnings to normalize from the fourth quarter onward, with new model launches — including the Avante and Tucson — expected to gain traction. Production-related disruptions are also seen as likely to be fully resolved by then.

Analysts say that for the share price to recover, excitement about the robot business must translate into tangible gains in corporate value, and the automaking business must return to form.