Hyundai Motor Company

We will now begin Hyundai Motor Company's business result conference call for the fourth quarter of 2025. Once again, the presentation material can be downloaded from the financial supervisory services electronic disclosure system at dart.fss.or.kr or the IR website at www.hyundai.com. Joining us are EDP Seung-Joo Lee, head of Planning and Finance Division, Bibi Cha Yong-Koo, Head of R&D Division, Harry Ahn, Head of Finance Accounting Sub-Division, Michael Yoon, Head of R&D Group, VP Young-Seok Lee, Head of Planning and Finance Division of Hyundai Capital. We'll first have H&C's presentation on the business results followed by Q&A session with the attending investors. Those who have questions are advised to press the star button followed by number one, after presentation. Now we'll proceed with the presentation by Michael Yoon, Head of IR Group at HMC. Hello, this is Michael Yoon, Head of IR Group. Welcome everyone to Hyundai Motor Company 2025 Q4 Business Results Conference Call. On behalf of Hyundai Motor Company, I appreciate your time for joining today's call. And please refer to the presentation HMC 2025 Q4 Business Results on the IR website. The presentation includes quarterly key messages, sales performance, and profit analysis. And for quarterly summarized cash flow statement and detailed regional sales breakdowns, please refer to the appendix. First Q4 Key Messages Despite concerns over tariff impact and the resulting flow down in demand, strong sales performance led to the highest fourth quarter revenue on record. Particularly in the U.S. market, we have achieved annual wholesale sales of 1 million units for the first time, driven by strong hybrid sales and a diversified SUV lineup. Finally, thanks to the robust hybrid sales in the U.S. market, the share of global hybrid sales recorded 16.3%. Next, the sales performance. In the fourth quarter of 2025, global wholesale sales recorded 1.03 million units and decreased of 3.1% compared to the previous year. Retail sales recorded 1.07 million units, reflecting 0.2 decrease worldwide. The annual wholesale decreased by 0.1%. to 4.13 million units, while retail sales decreased by 1.6% to 4.1 million units. Next, I'll go over details about the increase or decrease in wholesale sales through Key Market Summary. In the US market, sales increased 0.8% YY totaling 244,133 units. We continue to see strong sales performance of high margin vehicles as hybrid sales accounted for a record high 22.6% of total sales driven by new model effect of the Palisade hybrid and Genesis recorded the highest share of 8.9%. Sales of eco-friendly vehicles rose 29.2% YOY reaching 70,503 units driven by strong hybrid sales. In Europe, sales decreased 11.6%, totaling 138,152 units. Revised EV incentives in key countries like Italy and France led to EV wholesale sales increase of 54.1% compared to the previous year. As we continue to expand our key EV lineup such as INSTER and IME9, our EV sales accounted for 18.4%, sales of eco-friendly vehicles rose 12.1% YOY, reaching 62,078 units. In the domestic market, sales decreased by 6.3% YOY, totaling 177,496 units. Despite the reduced business days in the fourth quarter due to choose-up holiday break, the new model effect of the Palisade IM9 and Nexo led to a high proportion of SUV sales, sales of eco-friendly vehicles reached 62,189 units, a 1% YOY increase. Despite intensifying competition from rival hybrid model launches, the new model effect of hybrid drove hybrid sales to grow 89%, reaching the share of 29%. Next, I will explain the sales analysis by vehicle types. Global SUV sales, including Genesis, totaled 638,149 units, accounting for 61.8% of total sales. Eco-friendly vehicle sales increased by 12.1% YOY, driven by hybrid sales growth in the US market and expansion of EV sales in Europe. Despite the termination of EV subsidy programs in the US, EV sales rose 6.8% YOY, while hybrid sales continued to show strong momentum, growing 15.3% YOY. This concludes the discussion on sales, and now I will explain P&L. This page summarizes our income statement. Consolidated revenue increased by 0.5% YOY, 46.8 trillion won, and operating income decreased by 39.9% YOY to 1.7 trillion won. The automotive division's revenue increased by 2.4% YOY due to favorable FX environment and improved mix driven by hybrid and EV sales. The OP decreased by 49.7% YOY with tariff impact and increase in incentives. Revenue from finance division increased by 9.2% YOY due to interest rate cuts and FX fluctuations, while OP decreased by 2.8%. Net income decreased by 52.1% YOY to 1.2 trillion won. Next is quarterly revenue and operating income analysis. Revenue benefited from favorable FX rate contributing 1.7 trillion won while decreased global wholesale resulted in negative volume effect of 2 trillion won. Additionally, regional mix improvement and sales expansion of hybrid and EV contributed to 1.25 trillion won. Despite the decline in the financial segment, total revenue rose 0.5% YOY. Despite the record high fourth quarter revenue, unfavorable business conditions negatively impacted our profitability, including the tariff impact and higher incentives driven by intensified competition in key markets. Although contingency plan partially off the tariff impact, OP decreased by 39.9% YOY. Our Q4 cost of goods sold ratio recorded 83.3%, a 2.8 percentage point increase via Y. SG&E recorded 6.1 trillion won, which is a 1.9% decrease compared to last year due to decrease of sales warranty provisions owing to quarter rate exchange rate decrease. Finally, our net profit decreased by 52.1% to 1.2 trillion won. This concludes the presentation of the 2025 Q4 business results. Thank you. Next, EDP Seungjoo Lee, the head of planning and finance division will assess the company's business results in Q4 and the annual guidance. Good afternoon, this is EDP Seungjoo Lee, head of the finance division. I'll now present Hyundai Motor Company Q4 2025 business performance and Q4 dividend and shareholder return policies. First, revenue reach I'm going to share with you the performance of the fourth quarter and guidance status. Revenue reached 46.8 trillion won, marking a slight YOY increase, which was driven by an improved regional mix from increased North American exposure and higher EB and HD sales. Although a weaker one offered favorable effects, offering profit declined by 1.1 trillion won YOY to around 1.7 trillion won due to ongoing U.S. tariff impact. lowered sales volume resulting from fewer working days, and increased incentives driven by intensifying regional competition. With the 2015 tariff rate applied retroactively from November 1, tariff costs declined by $360.1 billion to $1.46 trillion However, the benefit of the tariff rate cuts were limited due to the sales of inventories subject to a 25% tariff in Q4. Nevertheless, the company actively executed contingency measures mitigating the negative tariff impact by around 60%. Additionally, shutdowns at European and Jeonju plants to accommodate new model launches led to an increase in fixed costs per unit, resulting in about However, the sales momentum from upcoming new model launches is expected to enhance future business results. Next is 2025 guidance. This guidance was first announced at the fourth quarter 2024 earnings call. and this outlined wholesale of 4.17 million units, revenue growth of 3 to 4 percent, and OPM of 7 to 8 percent. However, following the unforeseen U.S. tariff issue, the guidance was revised at the 2025 CEO Investor Day, with the OPM target lowered by 1 percentage point to 6 to 7 percent. Despite an unfavorable external condition, we presented an upward revision of the revenue growth, which was raised by 2 percentage points to 5 to 6 percent, driven by aggressive and flexible production and sales strategies. Due to geopolitical challenges and intensified market competition, total sales reached 4.138 million units, falling short of the target by 36,000 units. However, we achieved a history milestone by surpassing 1 million wholesale units in the U.S. market for the first time. Driven by growing global demand and our diversified lineup, hybrid sales continued their strong momentum, rising about 28% worldwide to 635,000 units, accounting for 15.3% of total sales. Despite the difficult environment as a result of our commitment to meeting the market communicated guidance with a higher sale mix in North America and strong performance in hybrid and EV models, revenue grew 6.3% YOY, reaching 186.3 trillion won, exceeding our revenue growth target. OP. declined YOY due to about $4.1 trillion in annual tariff impacts, but the OP margin reached 6.2%, falling within the guidance range that we have provided. Next, I'd like to discuss our year-end dividends and shareholder return policy. To enhance dividend feasibility and ensure the continuity of shareholder returns, Even in periods of earning volatility, the company introduced a minimum annual DPS of 10,001 based on common share from 2024. Despite a 25% YY decline in consolidated net income attributable to controlling shareholders in 2025, we remain committed to this pledge to our shareholders. Accordingly, we declared a year-end DPS of 2,501 based on common share, thereby fully delivering the minimum annual DPS of 10,001. As a result, our dividend payout ratio exceeded 25%, reaching 27.7%. In addition, in line with the three-year To meet the long-term share return policy announced in 2023, we completed the retirement of 1% Treasury shares in April. To achieve our target of TSR ratio of at least 35% in 2025, and to execute the plan to repurchase up to 4 trillion won of Treasury shares over three years, we plan to conduct a Treasury share buyback amounting to 400.7 billion won. Of this amount, around 200.2 billion won will be included in the calculation of the 2025 TSR ratio, The remaining around $200.5 billion corresponds to our previous analysis policy of retiring 1% of Treasury shares per year over three years and is intended for the final 1% retirement schedule for 2026. As such, this portion will be reflected in the 2026 TFR calculation upon requirement. The Treasury shares to be repurchased under this program are solely intended to enhance shareholder value and will be full retired during 2026. Their share repair program will commence on January 30th and will be conducted over a three-month period. This year, the automotive industry is expected to face a challenging environment marked by stagnant growth in key markets and intensifying competition, while continuous investment remains necessary to secure leadership in the future technology amid rapid changes. Despite these challenges, we will actively implement continuous measures to reduce cost and optimize volume and profitability by region with the aim of delivering solid results and fulfilling our commitment to shareholder return policy. Finally, we'd like to express our sincere appreciation for your continued support and interest in our long-term investment and efforts in future business, including robotics, autonomous driving, and the hydrogen ecosystem. Going forward, we'll continue to strive for sustainable growth as a smart mobility solution provider and provide regular updates on matters of importance to our shareholders. Thank you for listening. I'd like to present our 2026 Annual Guidance. Let me begin with our wholesale plan. Our sales target for 2026 has been set at 4.158 million units representing an increase of around 20,000 units YOY. This target reflects our assessment of industry demand by region and segment and please refer to page 2 for a detailed breakdown of regional and sales target. Turning to our consolidated financial outlook, we expect 2026 consolidated revenue to grow by around 1% to 2% YOY. Supported by continued AST improvement, and this outlook is driven by increased sales volume in North America and further expansion of hybrid deco sales. And we expect that there will be no temporary cost increase in 2026. So with respect to profitability despite a challenging external environment based on our fundamentals and competitiveness and cost innovation, we are targeting a consolidated OPM of 6.3% to 10.3% for 2026. Moving on to our investment plan, total investment for 2026 is planned at 17.8 trillion won, representing a 23.2% increase compared to 2025 actuals of 14.5 trillion won. By category, our investment is planned at 7.4 trillion won, up 21% year-over-year, driven by efforts to strengthen the Genesis and COSIS eco-friendly vehicle lineup, including Genesis HEV. PACEF is planned at 9.0 trillion won, 32% increase YOY for US localization related to investment in response to US tariffs and for electrification to gain future growth momentum. Structured investment is planned at 1.4 trillion won, representing a 7% decrease YOY. Regarding free cash flow, taking into account our profitability outlook and continued investment expansion in 2026, We expect free cash flow to be in the range of negative $1 trillion to positive $0.5 trillion. With respect to shareholder returns, in line with the value program announced on August 28, 2024, we intend to continue our shareholder return policy in 2026, targeting a shareholder return of at least 35% on a TSR basis. In closing, given amid heightened internal and external uncertainties in 2026, we remain committed to achieving our annual guidance through sustained profit generation and management activities that prioritize shareholder value grounded in strengthened product competitiveness and improved fundamentals. For further details, please refer to the 2026 guidance materials available on our website. This concludes our 2026 Annual Guidance Presentation. Thank you. Next, Vice President Young-Suk Lee, the Head of Planning and Finance Division of Hyundai Capital, will assess the Q4 results for the finance business. Good afternoon. Youngsuk Lee, head of finance at Hyundai Capital. Let me now present the five sectors, Q4 2025 performance and 2026 outlook. In Q4, Hyundai Capital and Hyundai Capital America delivered solid results by continuously expanding their role as the group's captive finance companies. I will now touch upon the details performance by company. First is Hyundai Capital. In Q4, under strengthened sales finance collaboration with the group by introducing specialized programs such as Genesis Finance, Hyundai Capital actively supported vehicle sales. As a result, installments and lease volume increased by 14.7% and 10.1% respectively YOY. Total product assets grew 3.6%. Lease income rose on the back of expanding high-value model-based lease assets. However, due to declining market interest rates and regulatory impact, installment and low-interest income decrease, leading to a slight YY decline in operating revenue, excluding effects and derivative effects. On the funding side, 14% of domestic bond issuance in 2025 was ESG bonds. By expanding a foundation for lower-cost funding with diverse borrowing offerings, such as offshore bonds and ABS, interest expense in Q4 decreased 2.7% YOY. In January this year, we were the first to issue public funds in the amount of 500 unit euros as a credit fund company, further demonstrating strong global funding competitiveness. Despite continued downward pressure on soundness in the industry, driven by real estate stress in the regional area and rising household debt and others, Hyundai Capital maintains solid performance through a high-quality captive portfolio and active NPL disposal recording a delinquency rate of 0.82%. In spot-out decline in leave costs, we rather increase provisioning for preemptive risk management. As a result, total operating expenses rose slightly while driving a decline in operating profit in Q4, however, with equity method gains from overseas procedures increasing profits before tax rose 13.6%. In 2026, Hyundai Capital intends to strengthen liquidity to navigate heightened market volatility and defend profitability through funding cost management and OPEX optimization. The company will further enhance digital capabilities through data collaboration at the group level and adoption of AI in core operations. Globally, Hyundai Capital is preparing to launch its finance subsidiary, India, and further advance capabilities across overseas subsidiaries to reinforce position as a leading global mobility finance provider. Next is Hyundai Capital America. Despite macro uncertainty in 2004, thanks to strong vehicle sales trends at the group level since the beginning of the year, and a high 72% P-rate, we recorded growing trend across the overall portfolio. In particular, prior to the RA subsidy expiration, the lease volume of eco-friendly vehicles increased rapidly, driving a 32.2% YOY rate in lease assets and a 16% growth in total product assets. On the backup robot asset growth, installments and lease income grew in Q4 YOY, keeping operating revenue at a similar level to last year. For funding, ACCA issued a total of $11.9 billion in public bonds in 2025 and successfully debuted in the Euro bond market in June, impacted by an increase in total borrowing interest expense in two, four rows, 14.3% YY. In terms of asset soundness, above 85% of the customers were rated prime, with those subprime rated recording less than 1%. Although the Fed's debt expense went up with the increased provisioning for residual value risk management. However, as total operating expenses declined slightly, OPQ4 grew 48.4% YYY. In 2026, tariff impact, interest rate volatility, and inflation are expected to create a challenging environment. Nevertheless, HCA would like to maintain sufficient liquidity based on strong credit ratings to navigate this urgency. The company will continue to support auto sale financing to sustain asset growth and secure outstanding financial sustenance through discipline risk management. Added to that by diversifying business such as financing for the group's new businesses, the company will broaden its role as the HMG's global mobility finance company. This concludes my presentation. Thank you for listening. With that, we'll conclude the presentation and take your questions.

Please limit your questions to two.

Now Q&A session will begin. Please press star 1, that is star and 1, if you have any questions. Questions will be taken according to the order you have pressed the number star 1. For cancellation please press star 2, that is star and 2 on your phone.

The first question will be provided by Juwon Yoo from Dale Investment and Securities.

Please go ahead with your question.

Yes, hello. I am a researcher, Yoo Ji-woong, of Daolchihwa Banking. Thank you for the opportunity to ask a question today. I will ask two questions. Today, you talked about the cost roughly. You also said that there was a quarter of a fixed cost of 200 billion won in the quarter. In fact, if you look at our quarter's performance, the customs cost was about 1.5 trillion won, and this is actually has already started to fall compared to the third quarter. However, our sales profit in the fourth quarter has dropped nearly 1 trillion won compared to the third quarter. So, in fact, the fixed cost has been mentioned, but basically, the interest rate has begun to decrease, so it is estimated that the expectation for earnings could have risen a little more. So, other costs I think it would be helpful if you could tell us in detail what kind of costs occurred in the fourth quarter and whether there are possibilities to occur in the first quarter. And secondly, our company said that the total investment amount for the next five years will be about 77 trillion won based on the last CID. Now, if you calculate it, it's an average of 14 trillion won. This year, the number you gave is 17.8 trillion won. In other words, from the perspective of the company for the past four months, we think it is part of the review that we have decided to increase the amount of investment rapidly. I wonder if there is a recently decided investment option to be implemented at the beginning of this year or at the end of this year. Thank you for the question.

Thank you for giving me the opportunity. I'm Yu-Jung from Tao Securities. So I have two questions regarding cost. First, you mentioned about the fixed cost for 4Q being close to 200 billion Korean won, and the tariff in Q4 was 1.5 trillion, which is lower than the amount for Q3. However, the operating profit for Q4 has gone down by 1 trillion, So, all in all, although the tariff cost has gone down, the expectations were high that the cost would also get better. So, I was wondering if there were any other costs that ought to be occurred in Q4 for this result, or are there any other costs that are expected for Q1? It's based on the CID announcement. You said that you were planning for the five-year $77 trillion investment. So if you divide that on an annual average, that comes close to about $14 trillion year one, $14 trillion. And this year you announced that the investment will be around $17.8 trillion. So for the past four months, have there been any drastic measures to make new investment decisions? Or maybe end of last year or earlier this year or for the year of 2026, do you have any new investment decisions that's to be executed?

Yes, first of all, before I answer the question, when I announced the annual results, I mentioned that Before answering your question, I think during my presentation, I made some numerical error.

So the buyback of the treasury shares, I said it was $470 billion, but in fact, it is going to be $400.7 billion.

Yes, I will answer the first question. According to the introduction of new cars in the Jeonju and Turkey factories, the fixed cost has increased temporarily, which is about 200 billion won. In addition to that, I understood that there is another temporary cost among other costs. In addition to that, the cost of human resources, which is reflected at the end of the year, . . . . . In the process of appreciation, we had an incentive of 36 months for lease, but when we checked the actual lease average period, it was about 31 months, so the cost and profit mismatched, so the amount adjusted at once is about 1.3 billion won. This is the amount adjusted at once at the end of the year, so it will not occur from next year.

So to answer your first question, I mentioned that there's going to be an increase in fixed costs, about $200 billion, due to new cars being input in Jeonju and Turkey plants. And you asked if there were any other costs that result in this increase in fixed costs. So there were temporary increase in fixed costs. At the end of last year, we had to reflect the increase in labor costs, which came to about $140 billion. And also there was a quality cost that occurred for Capco, which came to about $100 billion. So that was just our temporary cost that was a one-time happening for the end of the year. And also with HCA, during the auditing process of its fiscal orders, it was found that usually for lease cards, we set the time to 36 months for the incentives, but it was found that on average the use of the lease was 31 months. So we were adjusting the cost and profit, and that was altogether reflected in the financial sheet. So that resulted in $130 billion at the end of the year.

And in addition, is the first quarter of 2026 better than the fourth quarter? Is the cost better? I explained it, and I will tell you a little bit about the performance of the first quarter. In the fourth quarter, as the IRA was abolished, the electric vehicle stock of the dealers began to accumulate a little bit. So, I think we need to relieve the stock burden a little bit, and the So I think it will be helpful in the first quarter, and it will be better in the second quarter.

So I think I pretty much explained if any further costs were going to be created in Q1 of 2016 compared to Q4. But if I'm to give you a bit more of elaboration on the performance regarding Q1, with IRA being abolished in Q4 last year, the EV inventory of our dealers is now piling up. So we are really trying to decrease this inventory amount. And that's why we have made a strategic approach so that we can lower the inventory in Q4.

And we believe that this will help with our Q1 performance. Thank you. . . . . . . . . .

Now, moving on to your second question, you said that, well, the CIDO announced a total of $77 trillion investment for five years, and on an annual average, it comes to $14 trillion. And this year, we announced an investment of $17.8 trillion, and whether there is a new investment plan that is coming ahead. However, that is not the case. It's just that our investments are mostly focused on 2026 and 2027. So I think this year will probably be the peak of our investment size. So overall, the total investment size where Pi has not grown is still the same.

And to add a little more to the investment, we will continue to invest in future investments. We have been investing in various new businesses for four years, and we think that there is a recent reflection of the value of investment in the future. So we will continue to invest in the future. We will not reduce the investment for the future. We will thoroughly verify the effectiveness of the investment that goes into it and try to take it as an opportunity to turn it into an investment for the future.

And just to elaborate further regarding our investment, we will continue our investment for our future businesses. We have been doing this from four years ago, and I think most recently this value is now represented through our share prices. However, we are still trying to make sure that our investment is effective and efficient. And within that decision, we'll be making our priorities. so that with the same high investment that we have, the same high budget that we have, we make the most effective and efficient investment.

Overall, we will not be reducing our investment for our future.

The following question will be presented by Yoon Young Lim from Samsung Securities.

Please go ahead with your question. the net burden is 1 trillion won, 2 trillion won, 1 trillion won, 5 trillion won, is it okay for us to look at this? And this year, anyway, the interest rate went down by 15%. Then, how much do we have to estimate in relation to this year? And this year, too, I would appreciate it if you could explain whether it is okay to think that such an effort to reduce the interest rate will be reflected. The second is, Looking at the size of the self-employed week, I think it's about 8% of the priority week. 8%, 9%. So, when you announced the policy on the stock market, you announced that you would increase the proportion of the priority week to reduce the exchange rate between the stock market and the priority week. Now, the stock market has risen so much that the priority week has not been able to keep up, so the exchange rate seems to have increased more. Although both have risen a lot. So I don't think we've increased the priority a little bit, but we're looking at whether the value will change next year or in the next five years, or if you think it's just right now. Thank you.

This is Eunyoung Lim from Hong Kong Securities. I have two questions. My first question is related to tariffs. You've mentioned during your presentation that the annual tariff impact is estimated to be 4.1 trillion won in 2025. And you've said that the mitigation impact was around 60%. So if I interpret your presentation, the net burden coming from the tariff impact will be around 1.2 or 1.5 trillion won. So if the tariff rate is going down to 15%, how can we estimate or forecast the impact for the year 2026 coming from the tariff? And I'm wondering if you're going to continue to make contingency to reduce the impact from tariffs. My second question is related to your shareholder return policy. If I look at the plan that you announced through the disclosure for the purchase of treasury shares, we believe that the portion of preferred share will be around 8% to 9%. But if I remember your presentation, you said that during your presentation you were going to close the gap between the preferred stocks and the common stocks. So if you look at the current price trend of the common stocks, actually the price of the common stocks went up dramatically, so that widened the gap between preferred stock and common stock. So I think the level of the preferred stock repurchase is not really enough, so I'm wondering if you're going to increase the portion of repurchase of the preferred stock in late next year or two years later?

Yes, I will answer the first question. This year's inflation rate is 4.1 trillion won, and we predict that the inflation rate will be almost the same as in 2026. As you know, last year's inflation rate was from April 3rd, but if you look at the actual time we were in stock, it seems that the inflation rate had an effect from mid-May to mid-May. . . . . .

If I answer your first question, we've explained that the impact from tariff was around 4.1 trillion, and what we are forecasting for the impact for this year, 2026, the level of the impact will be rather similar. As you all know, the tariff took effect as of 3rd of April, but will the tariff actually be applied to the inventory from mid-May, So when we were calculating the tariff impact when we set up the business plan, we realized that the impact from tariff will be similar between 2025 and 2026. And we had the mitigation impact of 60%. So you asked about if the contingent plan will be continued the next year. So I can say for sure that mitigation plan for the tariff impact will be maintained in this year. And with the limited budget and the

cost that was reduced this year was applied to the establishment of business plan for 2026. In order to match the 35% of TSR this year, we are going to buy 20.4 billion. In order to get the remaining 1%, we are going to buy 0.2% of the average. Because the average has more than 1%. Since the average has 0.8%, in order to buy 0.2%, we are going to buy 20.7 billion. But if you look at the 20.4 billion, we are going to buy 0.16% of the average, based on the share price, the share price is 0.2%. That's about 25%. In terms of proportion, it's 25%, and in terms of quantity, it's not that big, but I think it's in line with our direction. So, as you said before, I hope that the share price and the share price will be reduced a little more

Your second question was related to our repurchase plan for the treasury stock. So you mentioned that the gap between preferred stock and common stock is getting wider and wider. And you asked about if there will be any plan or direction that we can share with you in regard to how to close the gap between two different types of treasury stocks. So in order to meet the TSR ratio of 35%, we said that we are going to repurchase 200.4 billion, one of surgery stocks, and we said we are able to retire at 1%. So for that to happen, we are going to spend around 200.7 billion won and 0.2% for the common stocks. So as we've disclosed before, so when we dealing with 200.4, billion won, 0.16% will be composed of the common stock, whereas the preferred stock will account for 0.2%. That means if you look at translated into the proportion, that preferred stock will account for 25%. Of course, the number of the purchases won't be really big, but you can understand from our plan that how we are going to proceed with our shareholder return policy. So in order to close the gap between preferred stock and common stock, we are going to keep a lot of thoughts to it.

And once ready, we are going to communicate more with the market.

The last question will be presented by Jensen Kim from Merit Securities. Please go ahead with your question.

Hello. Thank you for the question. I would like to ask one question in response to the question related to tariffs. If I were to pick an event that made the biggest change in the value of our company's business value, I think it was last year when our chairman signed a contract for 50,000 GPOs at Kkambu Chicken. If you look at the official announcement content of our Hyundai Car Investor Day, Hyundai Mobis Investor Day, and CES Media Day, which was held after that last year, I think that the completion and distribution of smart cars will be held late this fall. I think it will start in September or October this year. Thank you for giving me the opportunity. I actually had a question about TARAP.

I think that was answered in the previous question, so I only have one question. I think the most significant event that HMC had done in terms of bringing change to our society and our value was the Kambu Chicken meeting last year and signing the contract in sourcing 50,000 units of GPU. And if you look at your presentations made during the CID or the MOVIS CID as well as this, CES Media Day, you announced plans to distribute and also present smart cards as well as the demo cards as well. And based on my own prediction, we believe that this will be possible maybe by fall at the latest. So, and I think we also had a look at Atlas and maybe the input of Humanoid in the meta-plans could be done by September and October. So to do that, you will have to start securing data for movement and control as well. So is it safe to think that the GPU installment and the actual operation will also be done at that time as well?

What should I say? POC? Yes, POC will be held from the end of this year. In addition, we are making a demo car for the smart car in the 26th year. Yes, I think it will be released in the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half of the second half It's been discussed and negotiated, and we are currently working on a specific plan for when and how to use it. If this is related to what you just said, there is a high possibility that GPUs will be used as it contains these things, so it may be in a year, but at this point, a clear plan has not yet been established. If such a plan is specifically established, we will be able to communicate again.

Yes, so as we had mentioned during the CES, we are planning to conduct a POC for the humanoids in our meta plant at the end of this year. And also the demo car, as far as smart cars, R&D is currently working on this, and it is expected to be launched in the latter half of this year. And we already have made a project code for this, and of course the demo car launch, there will be a small number of models, but it will come to the – it will be – by the end of the year. Regarding the contract for 50,000 units of GPU, we are currently working on the plan of when and how to use these chips. And it's probably likely that they may be used with the utilization of humanoids and smart cars as well. But we haven't come up with a concrete plan as of yet. So when that is done, we will communicate with the market regarding this.

Yes, thank you.

This concludes the presentation of the 2025 Hyundai Motor Company. Thank you for listening. If you have any further questions, please contact Hyundai Motor's IRC. Thank you very much for listening.

If you have any questions, please contact Hyundai Motor Company's IR Group. Thank you very much for your attention.