Hyundai Q2 to rebound from Q1, outperform sector

By Cheon Jong-woo

SEOUL (Reuters) - Hyundai (005380.KS), South Korea's top carmaker, could report quarterly profit more than doubled from the January-March period, and is set to outperform the rest of the ailing industry through the rest of the year.

Its affiliate Kia (000270.KS) is expected to report a 63 percent year-on-year jump in second quarter profit, helped by a weaker won and new models.

The softer local currency, along with growing appetite for smaller cars and a much-improved brand image, may continue to help Hyundai and Kia outperform its peers, analysts said.

Renewed hopes for a recovery in the global economy are also seen allowing Hyundai and Kia, which combined are the world's No.5 car maker, to keep ahead of competitors such as Toyota (7203.T).

"The recent global economic crisis was not a poison but a restorative to Hyundai as the company found a way to expand market share. Now, an economic recovery may help boost Hyundai's growth further," said Kang Sang-min, an car analyst at Tong Yang Securities.

The maker of the Elantra compact car is expected to post a net profit of 456 billion won (221 million pounds) in the second quarter, a Reuters poll of 10 analysts showed.

That is down 17 percent from a 546.9 billion won profit a year ago, but a vast improvement from a 225 billion won profit in the first quarter.

The 496.5 billion won forecast for operating profit is more than triple the January-March period.