1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,Seoul Securities Branch View HSBC Global Research at:h

2、ttps:/ The 20theditionof the EM Sentiment SurveyClick to viewHesitant bulls of summer We adjust forecasts to reflect the tariff impact,but stronger fundamentals and mitigation plans should reduce the hit Soft 2Q25e results look well-flagged;sentiment should turn as the tariff narrative has peaked;up

3、side seems overlooked HMC(Buy)is our preferred name;multiple indicators point to compelling value;we adjust TPs on earnings revisions Discounting the known;tariffs in,opportunities ahead:As the US tariff impact kicked in from 2Q25,we reflect net tariff costs after mitigation measures(2%price hike an

4、d USD500 cut to incentives)into our model:KRW3.4trn for HMC and KRW2.6trn for Kia,respectively,for 2025e(exhibit 6).However,we believe stronger-than-expected fundamentals from better mix and volumes,evidenced in record-high US market share,should help reduce the actual tariff hit.This leads us to ma

5、ke milder earnings cuts than the tariff impact.Also,our sensitivity analysis indicates that a lower level of tariffs could increase our 2025e OP estimates by as much as 20%(exhibits 7-8).As the deadline for tariff-related negotiations between the US and Korean governments approaches(1 Aug),we see ex

6、pectations for a potential tariff reduction building,driving a relief rally in share prices for Korean OEMs,which are notable laggards in the Korean stock market.Weaker 2Q25e results on tariffs and forex headwinds:We cut our 2Q25e OP for HMC,Kia,and Mobis by 9%/20%/1%,below Bloomberg consensus by 8%