Hyundai Motor profit surges on government stimulus

Hyundai Motor Co., South Korea's largest automaker, almost quadrupled fourth-quarter profit after government stimulus packages helped it boost global retail auto sales 52 percent.

Net income rose to 945.5 billion won ($822 million) from 243.5 billion won a year earlier, the Seoul-based carmaker said in an e-mailed statement today. That compares with the 815.6 billion won median of 22 analyst estimates compiled by Bloomberg. Sales gained 9.3 percent to 9.65 trillion won.

Hyundai rose to the highest level in more than three weeks in Seoul trading. The carmaker predicts vehicle sales will rise 11 percent this year to 3.46 million as it introduces at least three new models in South Korea, its most profitable market. Hyundai may also gain from a Toyota Motor Corp. recall that could damage the Japanese company's image in the U.S. and Europe.

"It will help Hyundai narrow the gap with Toyota in brand perception, which is its weakest point,"said Zayong Koo, a Seoul-based analyst at Nomura Holdings Inc. with a "buy"rating on Hyundai's stock. "Recalling millions of cars must be a big blow for Toyota's best-quality image."

Hyundai's shares rose 4.1 percent to close at 113,500 won, the highest level since Jan. 4, compared with the Kospi index's 1 percent gain. The stock has dropped 6.2 percent this year after more than tripling in 2009.

'Stronger Player'

"The company has emerged from the recent financial crisis as a stronger player,"said Park Hyoung Ryol, who manages the equivalent of about $430 million in stocks at Consus Asset Management Co. in Seoul, including Hyundai shares. "Competition will get tougher this year and the won will probably strengthen, but Hyundai will continue growing."