[Click eStock] "Kia Motors Expected to Slightly Miss Market Consensus in Q4"

[Asia Economy Reporter Oh Ju-yeon] KB Securities maintained its investment rating of 'Hold' and target price of 42,000 KRW for Kia Motors on the 14th, stating that considering the stagnation of the expected operating profit in 2020, the potential for stock price increase is limited.

Researcher Kang Sung-jin forecasted, "Kia Motors' operating profit in the fourth quarter of this year is expected to be 522.5 billion KRW, a 36.8% increase compared to the same period last year."

He analyzed, "Although the operating profit forecast has been raised by 15.5% from the previous estimate, it still falls 4.5% below the market consensus. The main reasons for the increase in operating profit are a 9.3% increase in sales volume excluding China compared to the same period last year and the enlargement of the segment."

Along with this, the investment opinion on Kia Motors was presented conservatively. This is because the operating profit of Kia Motors in 2020 is expected to be 2.1 trillion KRW, an 8.2% increase compared to the previous year.

Researcher Kang diagnosed, "This profit increase is smaller than the reduction factor of one-time sales warranty expenses related to the Theta 2 engine (300 billion KRW) compared to 2019. Although the sales volume including China is expected to increase by 13.4% in 2020 due to the new car effects of Seltos, K5, and Sorento (Kia's forecast is 6.8%), the profit increase effect is expected to be limited due to increased fixed costs, increased marketing expenses due to new cars, and costs related to the expansion of European xEV sales."

This content was produced with the assistance of AI translation services.