iM Securities forecast on the 6th that Hyundai Glovis (KOSPI: 086280) will report second-quarter 2026 operating profit of 478.2bn won, down 11.1% year on year, as soaring fuel costs erode margins across its shipping operations.
Revenue for the same period is estimated at 8.003tn won, up 6.8% year on year, while the operating margin is expected to narrow by 1.2 percentage points to 6.0%, from 7.2% a year earlier. The projected operating profit figure sits around 9% below the current market consensus.
The principal culprit is a sharp rise in bunker fuel prices. The Singapore VLSFO (very low sulphur fuel oil) price surged from $480 per tonne in February to $852 in March, before settling at $773 in April and $823 in May — representing a 61–78% increase from February levels. Fuel costs account for roughly 15% of the shipping division's operating expenses, and the year-on-year increase is expected to add approximately 70bn won to the cost base.
The shipping division is forecast to bear the brunt of the pain, with operating profit falling 35.1% year on year to 129.9bn won. Although division revenue is projected to rise 7.3% to 1.46tn won, buoyed by robust Chinese vehicle exports and a weaker won against the dollar, the company has been unable to pass higher fuel costs on to customers through freight rates — a failure that has proved particularly costly.
Relief is expected from the third quarter. The introduction of a bunker adjustment factor (BAF) — a standard shipping surcharge that allows carriers to recover fuel cost increases — should allow Hyundai Glovis to recoup most of the second-quarter fuel burden. Shipping division operating profit is forecast to rebound to 247.4bn won in the third quarter, up 26.5% year on year and 89.4% quarter on quarter. VLSFO prices have already stabilised, standing at around $600 per tonne in July, down from second-quarter peaks.
A surge in Chinese vehicle exports provides a further tailwind. As of May 2026, cumulative Chinese auto export volumes are up 63% year on year, with electric and plug-in hybrid vehicle exports having more than doubled (+110%). Shipments to Europe have risen 65%, boosting tonne-mile demand. Charter rates for 6,500-car pure car and truck carriers (PCTCs) have climbed 47% since the start of the year, from $47,500 per day in January to $70,000 in June.
iM Securities maintained its Buy recommendation and 12-month target price of 325,000 won. Based on the previous closing price of 197,000 won, that implies upside of approximately 65%. The brokerage also cited the stock's current dividend yield of 3.2% and the latent value of Hyundai Glovis's 11.25% stake in Boston Dynamics as additional reasons to buy.
For the full year 2026, iM Securities estimates operating profit of 2.166tn won, up 4.5% year on year, with revenue of 31.848tn won, a rise of 7.7%.