Thanks to the rapid growth of Chinese auto makers, shares of South Korea’s leading auto parts maker Mando Corp. are expected to gain traction despite lingering uncertainties over Beijing’s retaliation against Korean businesses following Seoul’s decision to deploy an U.S. antimissile system.

Mando’s shares have fallen 11 percent over a month after hitting 280,000 won ($244.05) in February 16. The recent slump in its share price is mainly attributed to a fall in shipments of Korea’s two largest automakers and Mando’s biggest customers Hyundai Motor and Kia Motors to China, Lim Eun-young, an analyst at Samsung Securities said. China`s economic retaliation due to South Korea`s deployment of the U.S. Terminal High Altitude Area Defense (THAAD) missile system has also soured investment sentiment in the auto industry, dragging down its shares, the analyst added.

But its shares are poised to rebound onwards thanks to an increase in Mando’s overall sales to China. According to a brokerage report from Samsung Securities, Mando’s sales in China are estimated to have risen more than 15 percent in the first two months of this year from the same period of last year after its Chinese customers including Geely have enjoyed robust sales. Chinese finished auto maker Geely took 25 percent of Mando’s sales, the second biggest share after Hyundai and Kia Motors’ 43 percent, during the fourth quarter ended December last year. Sales to U.S.-based General Motors accounted for 16 percent.

Sales of Mando for this year is expected to exceed 1.9 trillion won, up 5.7 percent from a year ago thanks to the stellar performance by China’s automakers including Geely and Great Wall, Jung Yong-jin, an analyst at Shinhan Investment said, adding that increased sales volume will offset the negative impact from the weak yuan that would depreciate sales value in the Korean won term, the researcher added.

Shares of Mando ended Wednesday at 253,500 won, down 1.17 percent or 3,000 won from the previous session.

By Kim Dae-gi

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