20170902-三星证券-HMC_playing_the_fuel-cell_EV_card_93页_4mb

Sector Update Summary

Core Content

This document provides an analysis of the electric vehicle (EV) and fuel cell electric vehicle (FCEV) sectors, focusing on the potential for FCEVs to become mainstream and the impact on related companies in South Korea. It also outlines the current market positions and target prices for several key firms involved in the EV supply chain.

Main Companies and Target Prices

• Hyundai Motor (005380 KS, KRW144,500)

  • Target price: KRW175,000 (21.1%)

• Hyundai Mobis (012330 KS, KRW251,000)

  • Target price: KRW300,000 (19.5%)

• Hanon Systems (018880 KS, KRW12,200)

  • Target price: KRW13,000 (6.6%)

• S&T Motiv (064960 KS, KRW51,800)

  • Target price: KRW65,000 (25.5%)

• Iljin Diamond (081000 KS, KRW12,500)

  • Target price: n/a

• Dae-ll Corporation (092200 KS, KRW10,300)

  • Target price: KRW13,000 (26.2%)

Main Points and Key Information

FCEVs vs. BEVs: Complementary Technologies

• FCEVs are expected to gain mainstream traction due to their high energy efficiency, low raw material cost burden, and eco-friendliness.
• FCEVs are more suitable for large passenger vehicles, SUVs, and commercial vehicles due to their fast refueling time (3 minutes) and long range (over 600km).
• BEVs are simpler and may attract new entrants, but their limited range and charging infrastructure pose challenges.
• FCEVs are seen as complementary rather than substitutes for BEVs.

FCEV Market Outlook

• The FCEV market is expected to take off in 2020 with global automakers launching commercial models.
• Hyundai Motor and Kia plan to debut FCEVs in 1Q18 and 2019, respectively, with the Genesis GV80 expected in 2021.
• FCEVs could become game-changers with mass production, expected to cut per-vehicle prices to USD27,000.
• The Hydrogen Council supports FCEVs, with members including Hyundai Motor Company (HMC).

China's Role in FCEV Demand

• China offers significant subsidies for FCEVs, up to CNY200,000, which is 5x higher than for EVs.
• China's NEV credit program gives automakers 5 credits per FCEV produced.
• Chinese bus operators have started adopting locally-made FCEV buses.

FCEV Technology and Cost Trends

• Platinum usage in fuel cell stacks has decreased significantly over time, from 200g in 2002 to 11g in 2016.
• The cost of FCEVs is expected to drop as technology advances and raw material costs decrease.
• FCEVs are expected to have similar energy efficiency to internal combustion engine (ICE) vehicles and zero hazardous emissions.

EV Value Chain and Key Players

• The EV value chain includes battery, power control, motor, and other components.
• Companies such as Hyundai Mobis, Hanon Systems, S&T Motiv, and Woory Industrial are expected to benefit from increased FCEV production.
• Iljin Composites is a notable supplier of high-pressure hydrogen tanks, which account for 20% of FCEV costs.
• Dae-ll Corporation is expected to benefit from FCEV-related supplies, with a target price increase of 26.2%.

Market Performance and Sales

• HMC/Kia saw a 151.1% year-over-year increase in green car sales in the first half of 2017, reaching 102,000 vehicles.
• Sales for EV parts makers such as Hyundai Mobis, Hanon Systems, S&T Motiv, and Woory Industrial increased significantly.
• Iljin Composites and Dae-ll Corporation also saw strong sales growth.

Investment Recommendation

• EV parts makers are expected to benefit from the growth of both BEVs and FCEVs.
• The value chain for EVs should retain its valuation premium.
• Companies with a strong presence in FCEV components are likely to see increased ASP (Average Selling Price) and sales growth.

Key Insights

• FCEVs are poised to go mainstream by 2020, with the potential to outperform BEVs in certain aspects.
• The EV value chain is evolving, with a focus on components such as battery systems, fuel cell stacks, and hydrogen storage.
• Government support, particularly in China, is a major driver for FCEV adoption.
• Companies involved in the production of FCEV parts, especially hydrogen tanks, are expected to see significant growth and increased market share.