Mando Corporation stood out among Korean automotive parts makers as its stable portfolio based on market diversification offset reduced orders from the country’s top finished carmakers Hyundai Motor and Kia Motors plagued by slow sales especially in China.

Mando’s second-quarter results slightly missed market expectations, but nevertheless fared well, compared with disappointing performance by its peer companies, including those affiliated with Hyundai Motor Group.

According to its disclosure on Tuesday, Mando’s second-quarter sales came to 1.39 trillion won ($1.24 billion) with an operating profit of 55.7 billion won. Sales fell 3.3 percent from a year ago and operating profit declined 13.9 percent. The bottom-line performance fell short of the consensus estimate by 5 percent.

At 1:10 p.m. shares of Mando were down 0.2 percent at 260,000 won.

In contrast, Hyundai Motor and Kia Motors missed market estimates pooled by FnGuide by 11.9 percent and 24.6 percent, respectively. The deviation goes more than 35 percent for Hyundai Wia and 16 percent for Hyundai Mobis, the two major automotive parts under Hyundai Motor Group. Industry peer S&T Motiv underperformed the consensus estimate by 13.8 percent.

“Mando’s quarterly performance deteriorated marginally due to reduced shipment to Hyundai Motor Group in China and a partial maturity of supply programs to GM in the U.S., but this reduction was offset by diversified sales to other carmakers in China, India, Brazil and Mexico,” said Kwon Soon-woo, an analyst at SK Securities.

In sales by region, Korea was the top market for Mando with 802.8 billion won in the second quarter, followed by China with 310.6 billion won, the U.S. with 244.7 billion won and other regions with 177.7 billion won. Compared to a year ago, there was no significant change in Korea where sales grew slightly by 9.1 billion won, but a bigger reduction was reported in China (-90.8 billion won) and the US (-37.7 billion won). Reduced orders from Hyundai and Kia in China were a major contributor to the poor performance, but an increase of 176.4 billion won in sales to Geely Automobile and other Chinese finished carmakers created a somewhat countervailing balance. Sales in other regions grew by 24 billion won.

Another noticeable change is its continuous growth in new orders. Mando’s new orders received in the first six months of this year amounted to 9.5 trillion won, meeting close to 80 percent of its full-year target of 12 trillion won. The company recently raised its annual sales target to 13 trillion won.

By Yoon Jin-ho

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