MIRA
INFORM REPORT
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Report Date : |
30.12.2013 |
IDENTIFICATION DETAILS
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Name : |
HYUNDAI CORPORATION |
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Registered Office : |
140-2,
Gye-Dong, Jongno-Gu, |
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Country : |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
08.12.1976 |
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Legal Form : |
Public Parent
Company |
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Line of Business : |
Subject is a holding company and trading arm of
the Hyundai Group of companies; engaged in import and export of ships, plant,
automobiles, steel, machines, chemical products, electronic products,
commodities & shipbuilding |
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No. of Employees : |
361 (2011) |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2013
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Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
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South Korea |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
South Korea ECONOMIC OVERVIEW
South Korea
over the past four decades has demonstrated incredible growth and global
integration to become a high-tech industrialized economy. In the 1960s, GDP per
capita was comparable with levels in the poorer countries of Africa and Asia.
In 2004, South Korea joined the trillion dollar club of world economies, and is
currently the world's 12th largest economy. Initially, a system of close
government and business ties, including directed credit and import
restrictions, made this success possible. The government promoted the import of
raw materials and technology at the expense of consumer goods, and encouraged
savings and investment over consumption. The Asian financial crisis of 1997-98
exposed longstanding weaknesses in South Korea's development model including
high debt/equity ratios and massive short-term foreign borrowing. GDP plunged
by 6.9% in 1998, and then recovered by 9% in 1999-2000. Korea adopted numerous economic
reforms following the crisis, including greater openness to foreign investment
and imports. Growth moderated to about 4% annually between 2003 and 2007.
Korea''s export focused economy was hit hard by the 2008 global economic
downturn, but quickly rebounded in subsequent years, reaching 6.3% growth in
2010. The US-South Korea Free Trade Agreement was ratified by both governments
in 2011 and went into effect in March 2012. Throughout 2012 the economy
experienced sluggish growth because of market slowdowns in the United States,
China, and the Eurozone. The incoming administration in 2013, following the
December 2012 presidential election, is likely to face the challenges of
balancing heavy reliance on exports with developing domestic-oriented sectors,
such as services. The South Korean economy''s long term challenges include a
rapidly aging population, inflexible labor market, and heavy reliance on
exports - which comprise half of GDP.
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Source : CIA |
Company
name & address
Hyundai Corporation
140-2, Gye-Dong,
Jongno-Gu
Seoul, 110801
Korea, Republic
of
Tel: 82-2-3901114
Fax: 82-2-3901103
Synthesis
Employees: 361
Company Type: Public Parent
Corporate Family: 3 Companies
Traded: Korea Stock Exchange: 011760
Incorporation
Date: 08-Dec-1976
Auditor: PricewaterhouseCoopers
LLP
Financials in: USD (Millions)
Fiscal Year End: 31-Dec-2012
Reporting
Currency: South Korean Won
Annual Sales: 4,852.8 1
Net Income: 45.8
Total Assets: 1,795.5 2
Market Value: 757.1
(06-Dec-2013)
Business
Description
HYUNDAI
CORPORATION is a Korea-based company engaged in the multinational trading
business. The Company operates its business through five segments: steel
segment, which provides steel plates, steel pipes, section steels and stainless
steel products; machinery and plant segment, which provides automobiles, ships,
small and mid-sized industrial plants, as well as green energy; chemical
segment, which provides petroleum, petrochemicals and others; electronics and
communication segment, which is engaged in the export of electronic products
and brand loyalty business, as well as energy resource segment, which invests
in natural and industrial resource projects, including natural gases, coals,
petroleum and others. For the nine months ended 30 September 2013, Hyundai
Corporation revenues decreased 8% to W3.895T. Net income before extraordinary
items increased from W45.72B to W99.19B. Revenues reflect Steel segment
decrease of 21% to W980.67B, Ship Buliding/Construction segment decrease of 9%
to W625.23B, Other segment decrease of 44% to W28.2B. Net income reflects
Intercompany Adjustment segment income totaling W733M vs. loss of W15.24B.
Industry
Industry
Metals and Minerals Wholesale
ANZSIC 2006: 3322 - Metal and Mineral Wholesaling
ISIC Rev 4: 4662 - Wholesale of metals and metal
ores
NACE Rev 2: 4672 - Wholesale of metals and metal ores
NAICS 2012: 42351 - Metal Service Centers and Other
Metal Merchant Wholesalers
UK SIC 2007: 4672 - Wholesale of metals and metal ores
US SIC 1987: 5051 - Metals Service Centers and Offices
Key Executives
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Name |
Title |
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Mong Hyeok Jung |
Chairman of the Board, Chief Executive Officer |
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Seok Gyu Lee |
Vice President |
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Mong-Hyuck Chung |
Chairman & Co-CEO, Board Member |
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Jong-Won Kim |
Board Member, Senior VP, Senior VP-Natural Resources |
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Kwang-Joo Kim |
Senior VP-Finance & Accounting |
Financial Summary
As of 30-Sep-2013
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Key Ratios |
Company |
Industry |
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Current Ratio (MRQ) |
1.16 |
0.56 |
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Quick Ratio (MRQ) |
1.07 |
0.45 |
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Debt to Equity (MRQ) |
1.19 |
1.01 |
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Sales 5 Year Growth |
25.59 |
91.29 |
Stock Snapshot
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1 - Profit &
Loss Item Exchange Rate: USD 1 = KRW 1126.849
2 - Balance Sheet
Item Exchange Rate: USD 1 = KRW 1066.4
Corporate
Overview
Location
140-2, Gye-Dong,
Jongno-Gu
Seoul, 110801
Korea, Republic
of
Tel: 82-2-3901114
Fax: 82-2-3901103
Web: www.hyundaicorp.com
Quote Symbol -
Exchange
011760 - Korea Stock Exchange
Sales KRW(mil): 5,468,423.0
Assets KRW(mil): 1,914,761.9
Employees: 361
Fiscal Year End: 31-Dec-2012
Industry: Miscellaneous Capital Goods
Incorporation
Date: 08-Dec-1976
Company Type: Public Parent
Quoted Status: Quoted
Chairman of the Board, Chief Executive Officer:
Mong Hyeok Jung
Industry Codes
ANZSIC 2006
Codes:
3322 - Metal
and Mineral Wholesaling
3321 - Petroleum
Product Wholesaling
0700 - Oil
and Gas Extraction
3323 - Industrial
and Agricultural Chemical Product Wholesaling
3419 - Other
Specialised Industrial Machinery and Equipment Wholesaling
3494 - Other
Electrical and Electronic Goods Wholesaling
0600 - Coal
Mining
350 - Motor
Vehicle and Motor Vehicle Parts Wholesaling
ISIC Rev 4 Codes:
4662 - Wholesale
of metals and metal ores
4661 - Wholesale
of solid, liquid and gaseous fuels and related products
4659 - Wholesale
of other machinery and equipment
4652 - Wholesale
of electronic and telecommunications equipment and parts
0510 - Mining
of hard coal
4669 - Wholesale
of waste and scrap and other products n.e.c.
06 - Extraction
of crude petroleum and natural gas
4510 - Sale
of motor vehicles
NACE Rev 2 Codes:
4672 - Wholesale
of metals and metal ores
4671 - Wholesale
of solid, liquid and gaseous fuels and related products
0510 - Mining
of hard coal
4675 - Wholesale
of chemical products
4652 - Wholesale
of electronic and telecommunications equipment and parts
4669 - Wholesale
of other machinery and equipment
4511 - Sale
of cars and light motor vehicles
06 - Extraction
of crude petroleum and natural gas
NAICS 2012 Codes:
42351 - Metal Service Centers and Other Metal
Merchant Wholesalers
423110 - Automobile and Other Motor Vehicle
Merchant Wholesalers
211111 - Crude Petroleum and Natural Gas
Extraction
424720 - Petroleum and Petroleum Products
Merchant Wholesalers (except Bulk Stations and Terminals)
424690 - Other Chemical and Allied Products
Merchant Wholesalers
423830 - Industrial Machinery and Equipment
Merchant Wholesalers
423690 - Other Electronic Parts and Equipment
Merchant Wholesalers
423860 - Transportation Equipment and Supplies
(except Motor Vehicle) Merchant Wholesalers
212112 - Bituminous Coal Underground Mining
US SIC 1987:
5051 - Metals Service Centers and Offices
5088 - Transportation Equipment and Supplies,
Except Motor Vehicles
5012 - Automobiles and Other Motor Vehicles
1311 - Crude Petroleum and Natural Gas
5084 - Industrial Machinery and Equipment
5065 - Electronic Parts and Equipment, Not
Elsewhere Classified
5169 - Chemicals and Allied Products, Not
Elsewhere Classified
1222 - Bituminous Coal Underground Mining
5172 - Petroleum and Petroleum Products
Wholesalers, Except Bulk Stations and Terminals
UK SIC 2007:
4672 - Wholesale of metals and metal ores
4669 - Wholesale of other machinery and
equipment
4511 - Sale of cars and light motor vehicles
4652 - Wholesale of electronic and
telecommunications equipment and parts
06 - Extraction of crude petroleum and
natural gas
05101 - Mining of hard coal from deep coal
mines (underground mining)
4675 - Wholesale of chemical products
46711 - Wholesale of petroleum and petroleum
products
Business Description
HYUNDAI CORPORATION is a Korea-based company
engaged in the multinational trading business. The Company operates its
business through five segments: steel segment, which provides steel plates,
steel pipes, section steels and stainless steel products; machinery and plant
segment, which provides automobiles, ships, small and mid-sized industrial
plants, as well as green energy; chemical segment, which provides petroleum,
petrochemicals and others; electronics and communication segment, which is
engaged in the export of electronic products and brand loyalty business, as
well as energy resource segment, which invests in natural and industrial
resource projects, including natural gases, coals, petroleum and others. For
the nine months ended 30 September 2013, Hyundai Corporation revenues decreased
8% to W3.895T. Net income before extraordinary items increased from W45.72B to
W99.19B. Revenues reflect Steel segment decrease of 21% to W980.67B, Ship
Buliding/Construction segment decrease of 9% to W625.23B, Other segment decrease
of 44% to W28.2B. Net income reflects Intercompany Adjustment segment income
totaling W733M vs. loss of W15.24B.
More Business Descriptions
holding company and trading
arm of the Hyundai Group of companies; engaged in import and export of ships,
plant, automobiles, steel, machines, chemical products, electronic products,
commodities & shipbuilding
General Trading Services
Trading Companies
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Strategic
Initiatives
Partnerships
Its green energy
team focuses on wind and solar projects and services. The solar offerings
include photovoltiac modules (mono-crystalline, multi-crystalline, thin-film
and black modules), inverters (with and without transformers) and other
photovoltaic products. Hyundai supplies wind turbines (1.65 megawatts DFIG
type, 2 MW DFIT type, 2.5 MW PMG type, 5.5 MW Full conversion type, wind
turbine components and electrical control systems); manages installations,
inspections; and carries out operations and maintenance of wind projects in
collaboration with Hyundai heavy industries. For the defense industry, the
company supplies artillery, ammunition, military vehicles, communication
equipments, aircraft and naval vessels. The company’s Resource Development
segment identifies and invests in natural resources.
May 21, 2012Total
To Resume Operations At Yemen LNGTotal SA (Total) said that it may resume its
operations at Yemen LNG next week, following a third explosion of 38 inch gas
pipeline in this year, Bloomberg reported. Yemen LNG is fixing the pipeline,
subjected to an explosion on May 14, 2012 at north of Balhaf Liquefaction
plant.Patrick de la Chevardiere, CFO of Total, said, "We will develop
better surveillance of the pipeline and stronger collaboration with each tribe
along the pipeline. This was done but evidently not enough if we have had three
explosions." Total owns 40% of Yemen LNG, while Hunt Oil Co.
Hyundai's green
energy team focuses on wind and solar projects and services. The solar
offerings include photovoltiac modules (mono-crystalline, multi-crystalline,
thin-film and black modules), inverters (with and without transformers) and
other photovoltaic products. Hyundai supplies wind turbines; manages
installations, inspections; and carries out operations and maintenance of wind
projects in collaboration with Hyundai heavy industries. Under imports, the
company imports petroleum, coal, machines and parts, steel, electronic and auto
parts, aluminum, nonferrous metals, other export-use raw materials and facility
materials. The company supports its operations across the world through its 42
offices located in various regions across Asia, North America, South America,
Africa, Europe and Middle East countries.
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Helpful |
Harmful |
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Internal Origin |
Strengths ·
Sustained
Financial Performance |
Weaknesses |
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External Origin |
Opportunities ·
Positive
Global Steel Demand Outlook |
Threats |
Overview
Hyundai
Corporation (Hyundai) is a Korean general trading company. It undertakes
international trade and distribution services for products ranging from plants,
machinery, chemicals, steel, automobiles, ships, electrical products and
electronics to general merchandise. The company has its operations in America,
South Korea, Middle-East, Europe, Africa, and Asia. The company through its
business diversity, worldwide presence and strong distribution capabilities
holds expertise in trading operations. Though the company is concerned about
competitive environment, uneven recovery and political problems, its growing
ship building business, increasing demand for Korean SME markets and new
contracts and agreements provide growth opportunities.
Strengths
Sustained Financial Performance
The company reported an enhanced financial performance,
which reflects its operational efficiencies. For the fiscal year ended December
2012, Hyundai reported total revenue of KRW 5,468,422.85m, as compared to KRW
5,448,881.80m in 2011, indicating an increase of 0.4%. The improved top-line
performance was supported by segmental performance which registered sound
operational figures. Due to higher selling/general/admin expenses, which increased by 24.1% from KRW
83,323.23m in 2011 to KRW 103,405.14m in 2012. The operating income of the
company declined by 45.5% to KRW 28,808.88m in 2012, as compared to KRW
52,823.63m in 2011. The company's operating cost increased sightly to 99.47% in
2012, as against 99.03% in 2011. Due to increased other net income by KRW
18,084.92m in 2012, as against other net loss of KRW 5,909.98m in 2011; and
lower provisions for tax, Hyundai reported better net income. The company
reported net income of KRW 51,566.71m in 2012, as compared to KRW 43,878.97m in
2011, indicating an increase of 17.5%. Improved financial performance will help
the company to manage working capital through retained earnings besides
supporting investments and expansion plans.
Expertise in Trading Operations
Hyundai is
Korea’s leading trading company that offers services related to export and
import of a wide range of products In addition, it is engaged in intermediary
trade and also provides financing services. The company exports the following
items: plant & relevant materials, electric & electronic products,
metal and steel products, ships, autos, machines, parts, petrochemicals, and
other commodities. The shipbuilding division of the company carries out sale of
new built vessels, repairing and modification of ships, sale of second hand
vessels, export and import of shipbuilding materials, and also financing
arrangement. Its plants division deals in design, supply, production, test run,
and installation of industrial facilities including power plants, industrial
plants and process plants. Hyundai also offers marketing, project organization,
conducting feasibility studies, engineering and design, manufacturing,
construction, installation, procurement, testing and commissioning services to
its clients across the globe. The machinery division deals with supply of
industrial machinery and equipment; electrical equipments; process plants and
equipments; and power generation equipments. Chemicals division deals with
petroleum, petrochemicals, plastic resin, rubber, other chemicals, and
bunkering. Its major petrochemical products include gas oil, fuel oil, naphtha,
synthetic resin, synthetic rubber, and bunker c-oil. It also supplies
intermediary products such as olefin. Moreover, it also deals with plastic
goods, textiles, tires, synthetic rubber products, agricultural and industrial
film, adhesives, construction materials, pipes, and electric components.
Hyundai's green energy team focuses on wind and solar projects and services.
The solar offerings include photovoltiac modules (mono-crystalline,
multi-crystalline, thin-film and black modules), inverters (with and without
transformers) and other photovoltaic products. Hyundai supplies wind turbines;
manages installations, inspections; and carries out operations and maintenance
of wind projects in collaboration with Hyundai heavy industries. Under imports,
the company imports petroleum, coal, machines and parts, steel, electronic and
auto parts, aluminum, nonferrous metals, other export-use raw materials and
facility materials. The company supports its operations across the world
through its 42 offices located in various regions across Asia, North America,
South America, Africa, Europe and Middle East countries. The company's client
base includes POSCO, HYSCO, and INI Steel in the steel industry. It also
exports products of the Hyundai Group, especially export vessels which are
manufactured by Hyundai Heavy Industries. The robust trading operations of the
company facilitate its growth.
Business Diversity
Hyundai maintains
various business activities, in addition to its trading business. The company
through its subsidiary Qingdao Hyundai Shipbuilding, is one of the leading
shipbuilding company and specializes in the construction of mid-sized
commercial vessels. Under Resources segment, Hyundai invests in natural
resources projects. The company invests in resource development related to oil
and gas, liquified natural gas (LNG), coal and mineral resources. Besides, the
segment invests in industrial resources such as lead ore, capacitor, biomass
fuel and poly-silicon. Some of the projects in which the company owns interests
include Oman LNG, Qatar LNG, Vietnam gas fields and Yemen LNG project. Hyundai
established POS-Hyundai, a joint venture with POSCO and POSTEEL that undertakes
import of steel coils and processes and distributes them to automobile and home
appliance companies in India. The company through PT. Hyundai Intl.
Development, a joint venture company with Lippo Group, supplies cost-effective
and strategically located industrial lots to international manufacturers and
also to various Korean companies that invests in Indonesia. Such diversified
business operations helps the company in securing its revenue generation stream
and mitigates the risks of being associated to a single business.
Weaknesses
Debt Obligations
High debt could
have a major impact on the company's operational performance as major portion
of the company's earnings would be diverted towards servicing of its debt
obligations. This could concern the investors as well as make it is difficult
for the company to raise funds at favorable terms from the market. Although,
the debt obligation declined slightly, but is still substantial, which has affected
the leverage ratios. For the fiscal year ended December 2012, the company's
debt declined to KRW 660,502.50m, indicating a decline of 2.36% over the
previous year. The company's debt to operating income ratio stood at 22.93
times in 2012 as compared to 12.80 times in 2012. Its debt to equity ratio
stood at 161.83%, which could concern investors. Such substantial debt
increases the debt servicing obligations of the company and impacts its cash
flows adversely. It could limit the company's ability to raise debt in future
and pursue other strategic opportunities. It would also increase the company’s
vulnerability to adverse economic and industry conditions.
Increase in Trade Receivables
Trade receivables
carry a risk of turning into bad debts besides increasing the working capital
requirements which in turn carries a cost component. In the fiscal year ended
December 2012, Hyundai's trade receivables stood at KRW 787,628.62m as against
KRW 755,237.65m in 2011, which represents an increase of 4.29% and forms 14.40%
of the total revenue earned in 2012. The total receivables, which stood at KRW
808,977.58m in 2012, formed approximately 56.54% of total current assets. This
shows the company carries its business to a large extent on credit. Trade
receivables represent the money owed to the company by its customers and needs
to collected based on the terms of contracts. If the recovery time (average
collection period) for receivables is high, then the company needs to finance
its working capital from other short term sources of fund. These sources carry
a cost component related to finance and interest charges which increases the
expense for the company and hence reduces the profitability. The credit sales
also carries risk of turning into bad debt. Under both the conditions, the
profitability of the company is effected. Increased trade on credit also
affects the cash position of the company. Its cash and cash equivalents
declined from KRW 360,994.44m in 2011 to KRW 353,969.18m in 2012, reflecting a
decline of 1.95%. The company's cash from operating activities significantly
declined from KRW 71,667.17m in 2011 to KRW 27,962.74m in 2012, indicating a
decline of 60.98%. This will have a negative impact on company's working
capital and expansion plans.
Opportunities
Positive Global Steel Demand Outlook
The increasing
demand for steel and steel products will enable the company to record strong
growth. The growth in steel demand will be driven due to high demand forecast
in developing economies. According to the World Steel Association (WSA) report,
global apparent steel use will increase by 2.9% to 1,454 million tonnes (Mt) in
2013, following growth of 1.2% in 2012. In 2014, it is forecast that world
steel demand will grow by 3.2% and will reach 1,500 Mt. Steel use in China is
expected to grow by 3.5% in 2013 to 668.8 Mt, following a 1.9% increase in
2012. In India, steel demand is expected to grow by 5.9% to 75.8 Mt in 2013,
following 2.5 % growth in 2012 supported by monetary easing to support
investment activities. In 2014, growth in steel demand is expected to further
accelerate to 7% following the reform measures aimed at narrowing the fiscal
deficit, coupled with measures to improve the foreign direct investments. The
US, achieved steel demand growth of 8.4% in 2012 due to the automotive and
energy sectors and an increasingly resilient construction recovery. Steel use
is forecast to grow by 2.7% to 99.3 Mt in 2013 and is expected to increase by
2.9%, exceeding 100 Mt in 2014. In the NAFTA region, apparent steel is expected
to grow by 2.9% and 3% in 2013 and 2014 respectively. In Central and South
America, steel use is projected to rebound by 6.2% in 2013 to 49.8 Mt from 2.6%
growth in 2012. The region’s steel demand is forecast to grow by 4.3% to 52.0
Mt in 2014. In Brazil, a rebound in investment coupled with the end of
de-stocking process is expected to bring apparent steel use growth of 4.3% to
26.2 Mt in 2013 and further growth of 3.8% to 27.2 Mt in 2014. Growth of
apparent steel use in the CIS region is projected at 2%, reaching 57.6 Mt in
2013. In 2014, steel demand in the region is expected to grow by 3.8% to 59.8
Mt. Steel demand in the MENA region is expected to grow by 3.2% to 65.2 Mt in
2013 after 2.2% growth in 2012. The increase in demand was supported by
reconstruction activities in the Arab Spring countries and Iraq as political
turmoil in the region phases out. In 2014, steel demand in the region will
further accelerate to 7.1% growth to reach 70 Mt supported by strong
construction activities. As the company trades in quenched and tempered steel,
which are niche grades and are more resistant to economic slowdown, it could
gain from the market opportunities.
Growing Markets : Automobiles
The company has
its operations spread across North America, Europe, Asia, and Other regions.
China, the world's largest car market, is expected to grow by 6% to 18.5
million units. The US car market is forecast to grow by around 6% to 13.5
million units. The demand for small and fuel-efficient vehicles is expected to
increase in emerging markets such as Brazil, India, China and Russia to
increase its sale to12.8 million units between 2012 and 2016. Economic
uncertainty in Europe is expected to reduce the number of cars sold by 4% to
12.5 million units. German markets are expected to consolidate at 3.1 million
units. The UK car market is estimated to stagnate at around 2 million units,
and French car market is estimated to contract by around 6% to 2 million units.
Brazilian and Russian markets are estimated to grow slowly. The company plans
to expand its dealer networks and manufacturing capacity in Asia Pacific
Africa. Significant declines are forecast for markets such as Italy and Spain.
The impact of natural disaster in Japan is expected to result in catch-up
effect as a result of production loss. Japanese market is forecast to grow by
20% to 4.8 million units. Indian car market is expected to register one of the
highest growth rates. The company could look forward to expand its operations
in emerging markets.
New Contracts
In 2012, the
company secured various contracts to supply equipments for varied industries,
which provides an assurance for a portion of revenue for next year. In November
2012, Hyundai Consortium comprising of Hyundai Corporation, Hyundai Engineering
& Construction and KEPCO KPS, received a $620m contract for Punta del Tigre
combined thermal power plant ordered by Usinas y Terminales Electricas,
Uruguay. In August 2012, Hyundai Engineering Co., Ltd. and Hyundai Corporation
won a $900m contract for a lube base oil projection facility project in
Shymkent, Kazakhstan. The contract was awarded by HILL Corporation. In July
2012, the company signed a $13m contract to supply 100 construction equipments
to Ethiopia. The supplied equipments include excavators and wheel loaders, to
be used in Ethiopian government’s large-scale construction field. In May 2012,
Hyundai Rotem and Hyundai Corporation signed a maintenance contract for 90
high-speed subway trains that were supplied to Ukrainian Railroad
Administration. In January 2012, the company and Hyundai Engineering &
Construction Co., Ltd. received contract from Termotasajero S.A E.S.P. to
construct a 160 MW coal-fired power station on an EPC basis in Norte de
Santander. Such contracts will help Hyundai to maintain a streamlined revenue
stream.
Growing Ship Building Business
Hyundai has
established its operations in ship building business. By acquiring Qingdao
Lingshan Shipyard, a 30 year old shipyard, located in Jiaonan City (China), it
consequently formed a joint venture named Qingdao Hyundai Shipbuilding. As the
company acquired interest in building 10,000-20,000 ton multipurpose cargo
ships which can be used as container ships and oil product cargo ships. The
company’s rapid growth in the Chinese market is expected to position it in the
list of top 3 shipbuilders by 2015. Hyundai Shipbuilding, in the first six
months of its launch, secured large-scale shipbuilding contracts and also
received 3 years of work load. Existing presence and further expansion of the
company in the shipbuilding business limits its business risks and could drive
up its financial performance.
Threats
Economic Slowdown and Market Dynamics
The company could
face several challenges due to global economic slowdown. Its operations are
subject to the effects of global competition, geopolitical risks, economic
environments, including inflation, recession, currency volatility and actual or
anticipated default on sovereign debt. The global economic downturn and the
uneven recovery are likely to pose challenges to the company in the next few
years. The global recovery is facing challenges related to tough economic
environment in the Euro area and weak business environment elsewhere. According
to a recent forecasts published by the International Monetary Fund (IMF),
global economic performance is set to rise by 3.5% in 2013 and 4.1% in 2014. In
industrial nations, macroeconomic growth will remain modest at around 1.4% in
2013 and only increase in tempo to 2.2% in 2014. In the US, overall growth of
2% in 2013 will be weaker than in the previous year. Within the Euro zone,
negative effects from southern Europe will continue to hamper development,
resulting to a 0.2% decline in economic output for 2013. An increase of 1%
expected in 2014. According to the German Institute for Economic Research (DIW
Berlin), the German economy is only due to expand by 0.9% in 2013 as a result
of a weak start to the year. The Austrian economy is expected to recover over
the course of 2013 and 2014 after the period of stagnation in the second half
of 2012. It is likely to achieve real growth of 1% in 2013, rising to 1.8% in
2014. Growth in advanced economies is expected to be lower, mainly due to
adverse spillovers from the Euro region. Such sluggish economic growth could
constrain some of the group’s operations.
Political Problems
There have always been conflicts and problems
between North Korea and South Korea. The relationships between these regions
have undergone strain over the years. As a major part of the operations of Hyundai's
are concentrated in Korea, any outbreak in military hostilities or a break down
in contacts resulting from the conflicts could have an adverse impact on the
company’s business performance. The increase in conflicts in the region would
not only affect its exports but also affects the company’s financial
performance.
Competitive Environment
Hyundai’s operations are subject to high
competition from small scale trading firms to large multinational corporations.
It also expects additional competition as it is planning to address new
markets. Also, new competitors would enter into its existing markets. The
trading environment, from one side affected by the general economic conditions
across the globe and from significant competition among the industry players,
which constantly strive for margins. Hyundai's key peers in the industry
include: SK Holdings Co., Ltd.; Itochu Corporation; IHI Corporation; Inchcape
plc; Nucor Corporation; Swire Pacific Limited; Hanjin Shipping Co., Ltd.; and
Hitachi Zosen Corporation, among others. Significant competitive pressure puts
upward pressure on margins. Inability to compete successfully and trade in high
profit items could affect the market and financial performance of the company.
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Corporate Family |
Corporate Structure News: |
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Hyundai
Corporation |
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Hyundai Corporation |
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Company
Name |
Company Type |
Location |
Country |
Industry |
Sales |
Employees |
|
|
Parent |
Seoul |
Korea, Republic of |
Metals and Minerals Wholesale |
4,852.8 |
361 |
|
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|
Subsidiary |
North Ryde, NSW |
Australia |
Motor Vehicle Wholesale |
1,120.7 |
126 |
|
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Subsidiary |
Schwalbach am Taunus |
Germany |
Computer, Office Equipment and Software Merchant Wholesalers |
|
5 |
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Competitors Report
|
Company Name |
Location |
Employees |
Ownership |
|
Hanjin Shipping Co Ltd |
Seoul, Korea, Republic of |
1,939 |
Public |
|
Hitachi Zosen Corp |
Osaka-Shi, Japan |
9,039 |
Public |
|
IHI Corporation |
Koto-Ku, Japan |
26,618 |
Public |
|
Inchcape plc |
London, United Kingdom |
14,120 |
Public |
|
Itochu Corp |
Minato-Ku, Japan |
77,513 |
Public |
|
Nucor Corporation |
Charlotte, North Carolina, United States |
22,200 |
Public |
|
Oceaneering International |
Houston, Texas, United States |
10,900 |
Public |
|
SK Holdings Co, Ltd. |
Seoul, Korea, Republic of |
124 |
Public |
|
Swire Pacific Limited |
, Hong Kong |
74,192 |
Public |
Executive report
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Board of Directors |
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Chairman & Co-CEO, Board Member |
Chairman |
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Chairman of the Board, Chief Executive Officer |
Chairman |
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Non-Executive Independent Director |
Director/Board Member |
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Non-Executive Independent Director |
Director/Board Member |
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Director |
Director/Board Member |
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Non-Executive Independent Director |
Director/Board Member |
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Board Member |
Director/Board Member |
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Executives |
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Chairman & Co-CEO, Board Member |
Chief Executive Officer |
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Chairman of the Board, Chief Executive Officer |
Chief Executive Officer |
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President & Co-CEO, Board Member |
Chief Executive Officer |
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Assistant Managing Director |
Managing Director |
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Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Board Member, Senior VP, Senior VP-Natural Resources |
Senior Management (General) |
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Vice President |
Senior Management (General) |
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Senior VP-Finance & Accounting |
Finance Executive |
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Senior VP-Ship & Machinery |
Other |
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Significant
Developments
Hyundai Corp
Announces Resignation of Co-CEO Nov 21, 2013
Hyundai Corp
announced the resignation of Kim Jeong Rae as Co-Chief Executive Officer
(Co-CEO), effective November 21, 2013. The Company's current Co-CEO, Jung Mong
Hyeok, will serve as CEO in the Company.
Hyundai Corp to
Receive Tax Refund Aug 22, 2013
Hyundai Corp announced that it has received the
final judgment from Supreme Court of Korea, according to which it will receive
value-added tax and income tax refund. The date of refund was not decided yet.
The related value-added tax and income tax of fiscal year 2010 was KRW
45,675,070,486 and KRW 5,813,523,560 respectively.
Hyundai Corp Signs Contract with Guam Power
Authority Aug 12, 2013
Hyundai Corp
announced that it has signed a contract with Guam Power Authority to supply
residual fuel oil. The contract amount is KRW 683,614,461,538.
Hyundai
Corporation Declares Annual Cash Dividend for FY 2012 Mar 04, 2013
Hyundai
Corporation announced that it has declared an annual cash dividend of KRW 500
per share of common stock to shareholders of record on December 31, 2012, for
the fiscal year 2012. The dividend rate of market price is 2.4% and the total
amount of the cash dividend is KRW 11,164,901,000.