[Click eStock] "Kia Motors, Profit Improvement Expected from Q3"

Ebest Investment & Securities Presents 'Buy' Investment Opinion and 40,000 KRW Target Price... Closing Price on 7th at 32,200 KRW

4th Generation Kia Carnival (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] As Kia Motors is expected to improve its profits from the third quarter, Ebest Investment & Securities has issued a 'Buy' investment opinion with a target price of 40,000 KRW. The target price has been revised upward from the previous 33,000 KRW. The closing price on the 7th was 32,200 KRW.

According to Ebest Investment & Securities on the 8th, Kia Motors' second-quarter performance is estimated at sales of 11.5 trillion KRW and an operating loss of 9.6 billion KRW. Compared to the previous year, sales decreased by 21%, and operating profit turned to a loss.

Wholesale sales excluding China were about 448,000 units, down 31% year-on-year. The average selling price (ASP) increase effect due to new car models is estimated to be about 10%. Researcher Yoo Ji-woong of Ebest Investment & Securities explained, "In the second quarter, the domestic plant's operating rate rapidly recovered in June, but due to the fixed cost burden incurred at the Mexico and India plants during April and May, a poor profit and loss performance was inevitable. Excluding China, sales volume fell by about 30%, but in the U.S., the recovery of the operating rate was temporarily delayed due to parts sourcing delays for the core Telluride model."

Once the operating rate recovery begins, a sharp profit improvement is expected from the third quarter. The operating rates of Kia's major overseas plants are expected to continue recovering this month. Researcher Yoo said, "With strong new car momentum in the domestic market, normalization of Telluride sales and full-scale expansion, and continued breakeven point (BEP) surpassing due to volume growth of eco-friendly vehicles, profit momentum is expected to resume from the third quarter. In particular, overtime work has started at the domestic plant since the end of last month, and it is expected that the recovery of export shortfalls caused by COVID-19 in April and May will be in full swing."

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