HD Hyundai Robotics, the robotics subsidiary of HD Hyundai Group, is engaging with financial investors (FIs) for pre-IPO funding, expecting a valuation of 7-8 trillion won ($4.9-5.5 billion).
According to investment banking (IB) sources on Feb. 6, the company has been seeking potential investors since late last year, with equity investment being the most likely method. The exact scale of the investment is yet to be determined.
Established in 1984 as part of Hyundai Heavy Industries, HD Hyundai Robotics began producing industrial robots in 1987 and has since supplied them to domestic and international car manufacturing plants. By 2021, the company had surpassed 60,000 industrial robots in cumulative production and is currently the leading player in South Korea’s robotics market, holding the top revenue spot.
HD Hyundai holds a 90% stake as the largest shareholder of HD Hyundai Robotics, while KT owns the remaining 10%. When KT invested in 2021, the company’s valuation was 500 billion won.
Despite a decline in annual revenue to 172.7 billion won in 2023, down from 189.2 billion won in 2021, HD Hyundai Robotics is now targeting a valuation of at least 7 trillion won, more than 14 times higher than before.
HD Hyundai Robotics bases its high valuation expectations on Doosan Robotics. Despite generating only 53 billion won in annual revenue, Doosan Robotics reached a market capitalization of up to 8 trillion won in December 2023. With revenue more than three times higher, HD Hyundai Robotics believes its valuation should fall within the 7-8 trillion won range. Even though Doosan Robotics’ stock price has fallen nearly 50% from its peak, its market cap remains at 4.5 trillion won.
Industry experts also note that HD Hyundai Robotics’ valuation expectations are not excessive compared to Rainbow Robotics, a subsidiary of Samsung Electronics. Rainbow Robotics’ 2023 revenue was just 15.25 billion won, less than a tenth of HD Hyundai Robotics’ revenue. However, its current market capitalization stands at 7.2 trillion won.
However, there are mixed opinions about the investment prospects. One IB source mentioned, “With strong investor sentiment toward the robotics industry, both domestic firms and foreign hedge funds specializing in pre-IPO investments are likely to show interest.”
On the other hand, another source cautioned, “The market situation is quite different from when Doosan Robotics went public and saw its stock price rise,” adding, “It remains uncertain how many investors will back the 7 trillion to 8 trillion won valuation.”
With this pre-IPO push underway, the market expects HD Hyundai Robotics to go public within the next two years at the latest.
