Hyundai Motor Co

Good afternoon, I am Michael Yoon, head of IR team. Welcome everyone to HMC's 2023 Q4 Earnings Call. On behalf of Hyundai Motor Company, I appreciate your time for participating and please refer to the presentation HMC 2023 Q4 Business Results on our IR website. For today's presentation, we have sales and financial summary. And for specific sales by region and statement of cash flows, please refer to the appendix page. First is our sales summary. Our 2023 Q4 global wholesale increased by 4.9% year over year to 1,089,862 units. while retail sales increased by 6% year-over-year to 1,084,555 units. In Q4, our wholesale increased due to strong sales in advanced markets such as North America and Europe. In our Korean market, sales increased by 3.4% year-over-year due to SUV sales expansion with the launch of the new Santa Fe in August last year. and strong sales of eco-friendly vehicles, thanks to the new hybrid models introduction. In North America, wholesale increased by 9.8% year-over-year with the strong sales led by high-value models. And in the US market, wholesale increased by 7.9% year-over-year, recording highest sales ever, owing to product enhancement of Genesis and SUV models. Despite the uncertainties in the U.S. market, EV sales also increased, including IONIQ 5, by actively taking sales strategy for lease and fleet. In Europe, whole sales exceeded the annual business plan and increased by 19% year-over-year due to new launch of Kona, In India, wholesales increased by 9.4% year-over-year and had stable sales in SUV segment with the launch of micro-SUV Axtor in July. Our 2023 global wholesales increased by 6.9% year-over-year to 4,216,898 units. while retail sales increased by 4.9% year over year to 4.1 million units. Next is sales by model and key status. Global SUV sales portion increased by 4 percentage point year over year to 55.2% due to global launch of new Santa Fe and Santa Fe Hybrid. Sales of eco-friendly vehicles increased by 27.7% year-over-year due to the expanded lineup of hybrid vehicles. Especially in Korea, hybrid portion increased by 3.3 percentage point year-over-year to 9.5% due to strong sales of Grand Jarcona and Santa Fe hybrid. Next is annual sales by model. Our SUV portion increased by 2.4 percentage point year-over-year to 53.9% while the penetration of Genesis Trend maintained 5.3%. Despite the slowdown in global EV markets, annual sales of record-friendly vehicles recorded 700K and increased by 37.1% year-over-year. That is the end of presentation on sales summary, and now I'll move on to financial summary. This is income statement summary. As disclosed today, fiscal year 2022 and 2023 income statements have been changed, reflecting the discontinued operation of HMMR. The detailed information will be provided through the further disclosure, and in this conference call, impacts from the discontinued operation for the fiscal year 2022-23 annual income statements and the 4Q-2022 and 4Q-2023 income statement will be delivered. Consolidated revenue increased by 8.3% year-over-year to 41.7 trillion KRW and operating income increased by 0.2% year-over-year to 3.5 trillion KRW. The automotive business revenue increased 6.1% year-over-year due to increased due to increase of volume makes improvement with high-margin vehicles, and the operating profit margin on a consolidated basis increased by 3.1% year-over-year. Finance division revenue increased by 29.7% year-over-year due to strong sales of vehicles and growth in penetration rate. Nevertheless, operating income decreased by 32.1% due to high interest rate. Net income continuing operation base increased by 29.1% year over year to 2.7 trillion Korean won. And loss of discontinued operation due to sales of the Russian plant was 457.3 billion Korean won. And net income inflecting the loss from the discontinued operation was 2.2 trillion Korean won. Next is annual income statement. Annual consolidated revenue increased by 14.4% year-over-year to 162.7 trillion Korean won and operating income increased by 54% to 15.1 trillion Korean won with 9.3% operating profit margin. Annual net income increased by 58.4% year-over-year to 13 trillion Korean won. Annual loss from discontinued operations due to the sales of Russia planned was 719.7 billion KRW, and net income reflecting loss from discontinued operations was 12.3 trillion KRW. Next is revenue and operating income analysis. Volume effect from sales increase had an impact of 1.6 trillion KRW. And despite the increase of incentives, strong sales in North America and the increase in ASP had a positive impact on EVIX improvement, contributing around 0.6 trillion KRW. Despite the appreciation of KRW, revenue increased by 8.3% year-over-year due to revenue increase in finance, business, and others. Regarding operating profit, volume increase led to a positive impact of 318.5 billion KRW, And also increased AST and drone sales in advanced markets upset the increased incentive levels, leading to a positive mixed improvement of 888.9 billion Korean won. However, due to the appreciation of Korean won, operating profit increased by 0.2% only. Next is annual revenue and operating income analysis. Volume impact from sales increase had a positive impact of 8.2%, 2 trillion Korean won, excuse me, And despite the increase in incentive level, product mix improvement led to a trillion Korean won increase. Revenue increased by 14.4% year over year due to increase of average won to US dollar rate in 2023. Regarding operating profit, volume increase effect had a 1.7 trillion Korean won impact, positive mix improvement effect that upset increased incentives had a 2.8 trillion Korean won impact. Also, due to base effective provision cost in Q3 2022, operating profit increased by 54%. Cost of goods sold ratio increased by 0.3% to 80%. SG&A increased by 11.7% year-over-year to 4.9 trillion Korean won due to increase of labor and R&D cost. Non-operating income had a decrease in loss and recorded 149.8 billion Korean won due to improvements of P&L in finance, business, and others. Net income that includes loss from discontinued operations increased by 28.8% year-over-year to 2.2 trillion Korean won due to increase of operating profit. Annual cost of goods sold ratio decreased by 0.7 percent point to 79.4 percent due to decrease in raw material prices. Despite the increase of labor and R&D cost, SG&A decreased by 0.5 percent year-on-year to 18.4 trillion Korean won due to decrease in provision cost. Non-operating income increased by 83.7 percent year-over-year to 2.5 trillion Korean won. Net income increased by 53.7% year-over-year to 13 trillion Korean won due to increase of OP margin. This is the end of our queue for 2023 business results. Thank you. Now, Seung Jo Lee, SVP of Planning and Finance Division will give us the evaluation on the fourth quarter results and the year-end dividend. Good afternoon. I am Seung Jo Lee, SVP of Planning and Finance Division. I'd like to discuss Q4 2023 business results. In Q4, despite increased incentives driven by slowing global EV demand and production normalization and the IRA impact, and current depreciation, HMC achieved global wholesale of 1.09 million units, resulting in operating profit of 3.4 trillion, and operating profit margin of 8.2% on a consolidated basis. The product mix improved with stable sales of Genesys and stronger sales of high ASP models such as SEVs and regional mix improved too with robust sales in the US and Europe. I'd like to now tell you about the sales volume. Recently, the rapid growth of EVs in the automotive market has encountered a slowdown due to various macroeconomic uncertainties including interest rate hike, and inflation. However, through the Hyundai Motorway announced at the CEO Investor Day in June last year, we are maintaining stable sales and profits by flexibly responding to market changes by utilizing our existing lineup of green vehicles, including hybrids and plug-in hybrids. Continued growth in Emerging economies like India and Brazil also played a significant role in expanding our sales volume. We are aware of the ongoing concerns in the global automotive industry due to external factors. Despite the concerns, we continued to deliver solid growth in our key markets, including achieving record sales in the US. Therefore, we delivered 1.09 million in sales, up 4.9% from a year earlier, and up 5% on a consolidated basis, excluding China. In Q4 of 2023, we saw the continued effect from the product mix improvement following prior quarters. SUVs increased 4.4 percentage point year-over-year to 58.8%, our highest SUV share in a single quarter ever. Genesis remains a high-margin vehicle contributing significantly to our consolidated operating profit. These high-margin vehicles accounted for nearly 60% of our total sales and will work to ensure that this product makes us sustainable going forward. In case of EVs, the worsening sales environment led to an year-over-year decline in sales volume in the fourth quarter, but we are maintaining a low single-digit profit based on the recent strong sales. Hybrids, which have significantly expanded sales during the EV downturn, are expected to continue their strong performance in the near term with sales growth of around 60% year-over-year. And profitability is already on par with that of conventional ICE or even higher for some models. This solid product mix improvement and flexible market response helped us deliver a solid fourth quarter despite an unfavorable currency environment. Turning to our fully results, sales were below guidance due to somewhat lower sales in emerging markets compared to our key markets, such as the US, Europe, and India, where we exceeded our business plan. But we significantly exceeded our targets at the beginning of the year with sales of 162.6 trillion won and operating margin of 9.3% driven by continued product and geographical mix improvements in favor of currency impacts. Next is incentive that many of you may be concerned about. EV incentives we raised as part of our IRA response are stabilizing, and incentives for ICE vehicles in the U.S. have consistently remained below the industry average. Moving forward, we'll continue to uphold the profitability-focused sales approach in our incentive policies. I'd like to conclude my presentation with an year-end dividend. In line with our mid- to long-term shareholder return policy allied in our Q1 earnings call, which includes quarterly dividends and the dividend payout ratio of 25% or higher of our consolidated net profit, we'll pay the year-end dividend. The end of the year dividend will be 8,400 Korean won per common share, which is a 25% dividend payout ratio. Regarding the plan to cancel 1% of our existing treasure stock every year, will retire 1% this April. HMC will continue to endeavor to achieving over 25% dividend payout ratio based on stable results going forward. Thanks for listening. Next is SEP Hyungsuk Lee from Hyundai Capital. On the 2023 business results and outlook for 2024. Hello, I am Hyungsung Lee, Head of Planning and Finance Division of Hyundai Capital. I'll report the full year 2023 business results and outlook for 2024 for the finance business. In 2024, we saw macroeconomic uncertainties in the market, such as economic downturn and high interest rate, while the finance business showed robust performance driven by HMG's strong car sales and solid auto finance portfolio, as well as our conservative risk management and outstanding liquidity management capacity. As we're in the face of the capital market crisis and the capital's domestic credit rating was elevated to AA+, solidifying our position as a captive auto auto financing company. In 2024, we plan to optimize our business portfolio and thus enhance profitability, better manage our asset soundness against any credit risk, and expand global finance coverage with HMG in order to bolster our market leadership in the auto finance market. I will now elaborate on the details of Hyundai Capital and HCA. First, Hyundai Capital Based on the HMC's production normalization and subsequent sales increase, as well as strong market demand, our new auto volume increased 17% and asset grew 4% year-over-year. Moreover, supported by the company's stable liquidity, we strengthened the sales support for HMG, expanding the auto finance share in our asset portfolio. from 78% at the end of 2022 to 82% at the end of 2023. With more competitive retail products and growing lease demand for high margin products, the cumulative operating revenue went up 18% in 2023. However, the rapid increase in interest rate and interest cost increased, combined with the overall bad debt cost increase in the financial market, operating profit and pre-tax income came down approximately 20%. In 2024, we expect uncertainties in the market, such as sustained high interest rates and global economic slowdown. Still, our plan is to focus on improving our fundamentals rather than expanding the size of the business through maintaining focus on auto finance, managing profitability, and proactively optimizing costs. Also, we'll continue to work with HMG affiliates for synergistic effects by expanding global coverage and providing financing for CPO vehicles with the aim of building a strong mid- to long-term growth foundation. Next is Hyundai Capital America, or HCA. With strong demand from American consumers, We saw both cumulative car sales and penetration rate go up in 2023, resulting in the auto financing volume up 53% year-over-year. Also, the mixed improvement led by SUV and continuous increase of average sales price raised our financial assets by 12% year-over-year. In 2023, operating income was up 12% year-over-year. However, due to interest cost increase from high interest rates and rise in bad debt cost, operating expenses increased too, dropping the operating profit by 39% year over year. In terms of credit risk, the share of prime customer was raised to 89% in Q4 2023, defending our asset soundness, and issued global bonds worth $9 billion four times throughout 2023, proactively securing liquidity. Next is our outlook on 2024. A soft landing is expected with lower inflation and falling rates, but uncertainties are still looming for 2024. Therefore, HCA will strengthen the management of residual values and borrowing portfolio to minimize the impact on our profit. Also, we'll foster better cooperation with HMG affiliates by supporting mobility business operations, improving financing and EV sales support. This is all for my presentation. Thank you for your attention. Next, Cha Young-Koo, head of the IR group of HMC, will give us the presentation on the guidance. Good afternoon. I am Cha Young-Koo, head of the IR. Since 2021, we have been providing annual guidance for our automotive business, and since 2022, for our consolidated business as part of our business transparency efforts. Throughout the year, We regularly update this guidance to reflect both internal and external changes in the business landscape. This practice aims to improve the visibility and confidence of our shareholders and investors in our performance. For 2024, our sales target is set at 4.24 million units of 26,000 units year-over-year as announced earlier this year in line with global industry demand. Please see page 2 for sales targets by region. On a consolidated basis for 2024, we anticipate a sales growth of between 4% to 5% year-over-year, driven by higher North American sales volumes and ongoing rises in ASPs. For operating margin in 2024 on a consolidated basis, we're targeting an operating margin of 8% to 9%, considering the positive effects of ongoing improvements in product makes and cost competitiveness enhancement, despite the deteriorating external business environment, including FX rate, interest rates, and concerns about global demand contraction. Our investment plan for the year is 12.4 trillion won, up 3.3% from our year earlier. We are allocating $4.9 trillion for R&D, marking a 19.5% rise from the previous year to support the increasing number of vehicles to be produced, including EVs, Genesis, and N brands, and secure future technologies for the SDV transition. For CapEx, we plan to invest 5.6 trillion won, down 13.8% from 2023. And for strategic investments, we plan to invest 1.9 trillion Korean won, or 23.7% increase. Regarding free cash flow, our revised expectation is a range between 2.5 to 4 trillion won, down $0.5 trillion from our previous guidance of $3 trillion to $4.5 trillion, reflecting continued shareholder returns and increase in investment. Regarding our shareholder return policy, we remain committed to the mid- to long-term approach announced on April 25, 2023, including dividend payout ratio of 25% or higher, quarterly dividends from Q2 2023, and canceling 1% Treasury stocks every year for the next three years. We'll continue to keep up with the policy to benefit our shareholders. In 2024, we'll strive to meet our 2024 annual guidance, building on improving profitability fundamentals and prioritizing continued profit creation and shareholder value. For more information, please refer to the 2024 guidance information available on our website. This is all for 2024 guidance presentation. Thank you.

That is all, and we'll now begin the Q&A session. 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 Kyungjae Hwang from Merrill Lynch Securities. Please go ahead with your question.

Hello, I'm Kyungjae Hwang from Merrill Lynch Securities. I have a question related to this year's business plan. Looking at the first half of this year in North America, I know that the line-up of new cars, such as the existing Santa Fe Hybrid, Tucson Facelift, and GB80, is being strengthened rather than the eco-friendly car, and it is expected that there will be quite a lot of benefits in terms of incentives. If you have any direction or operation plans for incentives in the year 2023 and 2024, please share them.

Hello, I'm Hwang Jung Jae from the Merrill Lynch Securities. With regards to the business plan this year, when I take a look at the North America's first half, instead of going eco-friendly, Sun Cafe or Tucson Facelift and GV80 and other new lineups are in queue. And I think there will be a lot of benefits if you utilize incentives correctly. And with regards to that, can you share the direction for us?

Yes, I will tell you. As you said, we are in North America, Santa Fe, Tucson, facelift, GV80, these new models, Santa Fe has a full model change. There is also a hybrid. As the new car goes in like this, the incentive level is expected to come down to a level that we can manage to some extent. Our incentive level has gone up because we use a lot of incentives in electric cars to respond to IRAs. The overall level has gone up. If you look at the difference between electric cars and internal combustion cars, the electric car has gone up a lot, but the internal combustion car is being managed below the industrial average right now. That's why we think it will be much easier to manage the internal combustion cars and ICs if we include Santa Fe or Face Lift. Thank you for the question.

As you said, we're training for Santa Fe full motor change and to some facelift and introduction of GV80. But the incentive right now is downwards to the manageable level. We have injected a lot of incentives to respond to the IRA. So if you separate the ICE models with EV models, you can see that ICE models are below industry average. And as I said, if we introduce Santa Fe and Tucson facelift, for the ICE models, we'll be able to manage incentives more easily, and the average will go down a little bit more.

Next question.

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

Please go ahead with your question. From the survey report, it seems that the stock price has started to go down since the third quarter. So, I think it will have a positive impact on the year-on-year. Nevertheless, I think it has a big impact on the financial side, which is similar to last year or conservatively given. So, how do you look at the financial side? In fact, if the stock price goes down in the middle of this year, it will be upside on the financial side, so I would like to ask if we can see the annual performance as an upside. Secondly, I think it's very positive because it keeps the guidance about the dividend, but I think that the stock price response is a little weaker than that of Kia, so I think that the market is hoping for additional self-sufficiency. But now there are so many investments, Yes, good afternoon.

I am from Samsung Security. I have two questions. The first part of my question is on the guidance. According to the audit report that has been released, I believe that from Q3, 2023, the materials cost has been constantly coming down, which will, I believe, have a good impact on an annual basis. However, according to the guidance, the profitability guidance is similar to last year. So I was wondering about the reason why you are taking a conservative approach to the profitability guidance. Is it because of the finance business? And if so, then how do you believe the upside in that business would be with the falling interest rates? So what is your outlook on the finance business under HMG? And my second question is regarding the dividend. I believe it's very positive that you're keeping your dividend policy that was announced last year. However, the impact on the stock price seems to be quite marginal compared to Kia. So I was thinking maybe the market is expecting the company to cancel additional treasury stock. So what do you think is necessary for the company to consider additional retirement of the treasury stock? Is it liquidity or is there any other element that is required for you to consider additional cancellation of the treasury stock?

Yes, I will tell you. Regarding the guidance, After reading the thank you report, I think it will get better in the future, but the guidance came out a little conservatively. I think you asked me a question like this. The reason for the drop in revenue is that we are going to reduce the cost, and there are parts that fall through the cost reduction activities. The price of the battery cell material that went up in the first half of the year went up a lot, and now the price of the raw material is falling. So, because the price is variable, we don't know how it will move. First of all, it is true that it is in the process of falling. So, it is true that it will have a positive impact on us. However, the rate of return for business is 1270 won, which is a very low level compared to the previous year. I predicted it. At the end of last year, it was at a reasonable level of 1,270 won, and I saw it in the market that 1,270 won was going to collapse, but in fact, in the beginning of this year, it was 1,320 won on the other side, and now the exchange rate has gone up to 1,330 won, so this part seems to have a negative effect on us. I think it's going to have a negative effect. Yes, on your question, I believe this is about, first of all, the guidance as suggested in the OD report.

Yes, compared to the first half of last year, the material costs have come down come down in the second half and this year. So your question was about why we are taking the conservative guidance on profitability, even if the costs are falling. The costs are falling because, first of all, because of our efforts to reduce the cost, and second of all, the battery raw materials costs are coming down in the second half compared to the first half or early 2023. However, the battery raw material prices are quite volatile, so we do not really know where to go with the price of battery raw materials. However, what's clear is that the cost is falling, yes. And also, we have another factor at play, which is $1 rate. In our business plan, we are projecting $1 to $71, which is lower than last year's. However, the short rate is appreciating again to 1,320 this year, and it once even touched 1,330 Korean won. So this will definitely have a positive impact on our performance, and if this continues, we will be able to achieve the guidance, and we might even be able to overachieve it. Second part of the question, Hyundai Capital will give you the answer.

Yes, I'm Lee Yeong-seok, CEO of Hyundai Capital. The reason why Hyundai Capital and Hyundai Capital America's profit decreased a bit compared to the previous year was due to the rise in interest rates due to the rapid rise in interest rates and the two reasons why the loss was normalized to the level before COVID-19. Both of these aspects are expected to be eased in 2024, Yes, I'm SVP Hyeong-seok Lee of Hyundai Capital.

Yes, as you said, in 2023, the profit and loss of Hyundai Capital and Hyundai Capital America were not as expected because of the rising interest rate and resultant interest spendings as well as the cost of bad debt. Both of the elements were going backwards to pre-COVID levels. However, the situation will recover in 2024. Therefore, Hyundai Capital and Hyundai Capital America will resume its growth in 2024 compared to 2023. But not so much, but it will be recovered slightly. However, it will not be big enough to have an impact on the operating profit margin of HMC.

Yes, then the second question was about the self-sufficiency. If there is a certain standard or rule in the company, and if you reach that standard or rule, are you planning to buy a subsidiary? You asked this question. We told you about the payment, and we told you about the guidance. In any case, as we said in April, we will continue to maintain 25% of the payment. Then, we will continue to maintain 25% of the payment. Then, we will continue to maintain 25% of the payment. I promised you. I will continue to do that. We have more than 4% of self-sufficiency. It is expected that about 400 billion won will be invested in 1% self-sufficiency. If all 3% is deducted, the remaining self-sufficiency will be about 1%, so if it is at that point, we will continue to review the self-sufficiency investment even in the middle. Yes, on the second part of the question regarding the cancellation of our treasury stock, your question was if there is any rule or standard for us to consider additional cancellation of the treasury stock.

As announced in our guidance and our dividend policy, we'll continue to keep over 25% dividend payout ratio and 1% cancellation of treasury stock over the next three years. We'll keep that promises. We currently have the dividend, excuse me, we currently have the treasury stock holding of 4% and 1% cancellation requires 400 billion Korean won. So when we complete the cancellation of 3% of the treasury stock holdings that we have, we'll have 1% remaining. So at that moment, or maybe before that, we'll consider your suggestion or any other way to bring back the benefits to our shareholders. So we are committed to keeping our promises regarding the shareholder return policy.

Next question.

The following question will be presented by Theodorus Hadiwitjaja from JP Morgan Asset Management. Please go ahead with your question.

Thank you very much for the time. I have two questions. The first one is on the recent slowdown of EV adoption in the US and also in Europe. So in general, how does this trend impact Hyundai? What is your plan in terms of adopting to this new trend? And also in terms of hybrid vehicles, what's your plan in terms of growing this segment for 2024?

Hello, I'm T.O. Do of J.P. Bogon. Thank you for your time. I have two questions. This is the first question. Recently, EV sales have been decreasing in the United States and Europe. I wonder what kind of impact this has on the present. If you have any plans to respond, please share that part. And secondly, regarding hybrid cars, Yeah, hi. Good afternoon.

This is Jayanku, head of IR. I think your first and second question, we can kind of combine it into one. But generally speaking, as you mentioned, the BEV market has definitely been slowing down. However, our overall outlook or direction that we have pointed out during the CEO Investor Day of achieving about 2 million unit sales by 2030 still holds. Hello, everyone.

I'm Gu Jiayong from the IR team. I think I can answer all of your questions in one sentence. As you said, Pure Electric Vehicles, or BEBs, are going through a downfall overall, but the direction we are thinking of is to maintain the goal of selling 2 million units by 2030, as we said at the CEO Investor Day. Of course, this will not happen naturally. Of course, there will be an increase, but this year, we are trying to sell 300,000 units, which increased by 12% compared to last year. This is a trend that has increased by 270,000 units.

And as you mentioned, I mean, again, as we mentioned that during the CEO Investor Day, you know, one of our strengths, we believe, is our flexibility in what we call the Hyundai Motorway, and able to produce, you know, shift from the ICE models to the eco-friendly BEV models, et cetera. And with the growing demand towards HEV, this year, actually, we're projecting about a 28% growth in the hybrids, reaching our target for this year is approximately 480,000 units. Last year we achieved about 370,000 units, so that represents about 11% of our total sales. and last year was about 9%. And if you recall the numbers that we presented by 2030, hybrid has actually also been a very strong contributor. By 2030, we estimate the hybrids will account for about 15%. The BEVs will account for about 34%. So those two collectively will represent about 50% of our sales in 2030.

And as I said at the CEO's Master Day, our company is very flexible. The Hyundai Motorway, which we have built, has been flexible as an eco-friendly electric car in an indoor car. As I said, the number of hybrids continues to rise. I think it will grow by about 28% this year. My estimate is 480,000 sales this year. And that's about 11% of the total sales. Compared to the previous year, last year, it took 9% of the total sales and sold about 370,000. And this number will contribute a lot to our goal in 2030. I don't know if you remember. Next question, please.

Next question is from Akimi Matsuda from Pimco Japan Ltd. The following question will be presented by Akimi Matsuda from PIMCO Japan LTD. Please go ahead with your question.

Thank you very much for taking my questions and sorry for maybe I missed some of the information on the website, but if you could actually let me know What's your total level of debt as of the end of the year and also net assets and net cash position at the OEM? That's my first question on the financial. And then my second question is, can you also a little bit share the backgrounds to increase in penetration of hybrids in Korea instead of BEV? Thank you very much for two questions.

Hold on a second. I need to find the numbers. OK, can you hold one second?

Of course. Hello, I am Akimi Matsuda from Pimco Japan. First of all, thank you. I may have misread the information on the website. I would like to ask you about the numbers of the U.S. market. The first is the net asset, and the second is the net cash flow. Secondly, the market share of hybrids that have debuted in the Korean market is increasing, and I would like to ask you about the numbers.

Okay, I'm still trying to find the other numbers, but for the net cash position ex-finance right now, we're currently at about a little over $16.1 trillion, so it's gone up from about $14.6 trillion, so it's gone up a little bit, excluding the finance side. The other numbers If it's okay, can we actually send it to you by email? Because I don't have those numbers on top of my head. If that's okay, we'll get back to you by email. And in terms of the second question was, okay, hold on a second. We need some numbers again. Anyway, as I mentioned earlier, the total hybrid, you do just one for the domestic side, right?

That is correct.

Because, yeah, I mean, I mentioned that total hybrid accounted for about 9%. I think for domestic is a little bit higher. It's about 20% for this year projection for the four hybrids. About 20% is the penetration for 24. Last year, 23 was about 18%.

Yes, I'll give you an answer. I'm a financial expert. The first question is about the net cash position. It's a little over 16 trillion won in the U.S. Except for finance, It's 14.6 trillion won. I don't remember all the numbers, so I'll send you an email. The second question is about the Korean market. You asked about the market share of the Korean market. The Korean market is higher than other markets this year. It was 20% in 2014 and 18% in 2013.

Thank you for your attention.

If you have any questions, please contact Hyundai Motors IR team. Thank you very much for your attention.