Hyundai Motor at 0.8x P/B: ETFs Positioned for the Next Physical AI Cycle
The Physical AI Premium Has Faded — Now Comes the Waiting
Hyundai Motor Fixed-Weight and Value-Chain ETFs
After Hyundai Motor’s CEO Investor Day on August 26, a wave of brokerage reports lowered their target prices for Hyundai Motor (005380). The common reason was a lack of near-term momentum. Analysts largely agree that the long-term vision around “physical AI,” including humanoid robots and autonomous driving, remains intact, but there are few short-term catalysts.
Even so, the average target price issued over the past month is KRW 672,500, while the lowest target price is KRW 500,000. These imply upside potential of roughly 92% and 43%, respectively, from the current share price.
In general, analysts’ target prices are revised around events such as quarterly earnings announcements and therefore often reflect an investment horizon of less than one year. Much of the market’s disappointment may already be reflected in the stock, which has fallen more than 50% from its peak of KRW 783,000. Hyundai Motor now trades at around 0.8 times price-to-book and about 9 times forward earnings.
Hyundai Motor Group ranks third globally in vehicle sales. Volkswagen, the world’s No. 2 automaker, is cutting its workforce on a large scale and lowering its operating margin outlook. Hyundai Motor, by contrast, raised its 2030 operating margin target to 9% at its CEO Investor Day. This suggests that the company may already have an edge in underlying earnings power and fundamentals.
As previously announced, Hyundai Motor Group plans to install 50,000 Nvidia GPUs at a data center in Saemangeum. Boston Dynamics, its humanoid robotics company, is operating the Robot Meta plant Application Center, or RMAC, in Georgia in the United States and plans to expand the facility tenfold next year. It also plans to begin operating a robot manufacturing facility with annual production capacity of 30,000 units from 2028.
Motional, Hyundai Motor Group’s U.S. autonomous-driving joint venture, is scheduled to begin operating fully driverless robotaxis with Uber in the fourth quarter. Hyundai is also supplying the IONIQ 5 to Waymo, Google’s robotaxi platform. This could position Hyundai Motor as one of the three major pillars of the U.S. robotaxi market alongside Tesla (TSLA) and Google (GOOGL).
The company also plans to commercialize Level 2 partial autonomous-driving technology in the first half of 2028. It is true that Hyundai has been slower than Tesla and Chinese automakers in implementation. However, in autonomous driving, where driving data is critical, Hyundai’s annual sales of more than 7 million vehicles across roughly 190 countries represent significant long-term potential.
The physical AI premium may have disappeared from the share price, but the long-term roadmap remains unchanged. The stock has fallen sharply, but if physical AI is ultimately the destination of artificial intelligence development, the theme may still deserve consideration from a long-term perspective.
There are currently seven ETFs centered on Hyundai Motor (005380), five of which were launched this year with the physical AI theme in mind. Among equity ETFs, RISE Hyundai Motor Fixed Physical AI (0190C0) was the first to be listed in May, followed by KODEX Hyundai Motor Robotics Value Chain TOP3 Plus (0204D0) in June. More recently, after LG Electronics (066570) added actuator manufacturing—a key physical AI component—as a core business, TIGER Hyundai Motor-LG Electronics Fixed Physical AI Value Chain (0241R0) was launched to reflect this development.
In the bond-mixed category, Hana Asset Management launched 1Q Hyundai Motor-Kia Bond Mixed 50 (0206G0) in June, followed by KIWOOM Hyundai Motor Group TOP3 Bond Mixed 50 (0220A0) the next month. 1Q Hyundai Motor Group Bonds (A+ or Higher) & Treasury-MSB (492500), launched in 2024, is the only bond-focused product.
In the smartphone industry, Apple (AAPL) vertically integrated both its operating system and chip design. Samsung Electronics (005930), however, relied on Google’s (GOOGL) operating system and Qualcomm’s (QCOM) chips. A similar contrast may emerge in physical AI. Tesla (TSLA) is attempting to vertically integrate semiconductors and AI models, while Hyundai Motor (005380) is pursuing collaboration with companies such as Nvidia (NVDA) and Google. In this respect, Hyundai could evolve into a global partnership model similar to Samsung’s Galaxy ecosystem and potentially emerge as one of the two major players alongside Tesla.
There are concerns about Hyundai Motor’s core automobile business as Chinese automakers such as BYD pursue aggressive marketing strategies. However, Chinese companies face limits in their ability to collaborate with major U.S. technology firms. In humanoid robotics and autonomous driving, Hyundai Motor’s partnership model with U.S. Big Tech could provide both downside support for the stock and meaningful long-term upside potential.
한글 원문 '한경 프리미엄9 구독': https://www.hankyung.com/article/202609304678i