[Click eStock] "Kia Motors, Strong June Sales... Operating Profit Forecast Raised"

KB Securities Report
Operating Profit of 1.1 Trillion KRW This Year... 46% Decrease from Previous Year

[Asia Economy Reporter Minji Lee] KB Securities on the 21st issued a neutral investment opinion on Kia Motors and raised the target stock price by 2.7% to 38,000 KRW. This reflects the upward revision of the operating profit forecast based on better-than-expected June sales.

Kia Motors' operating loss in the second quarter is estimated at 158.3 billion KRW, turning to a deficit compared to the same period last year. Seongjin Kang, a researcher at KB Securities, said, "The operating loss forecast was reduced by about 151 billion KRW compared to the previous estimate, reflecting June car sales," adding, "The market expects an operating profit of 75.8 billion KRW."

This year, Kia Motors' global wholesale sales excluding China were tentatively estimated at 448,000 units, down 31% from the same period last year. This is 25,000 units (5.8%) higher than KB Securities' previous forecast. Applying the contribution profit per unit of 5.46 million KRW from the same period last year, the effect of the exceeded sales volume on the operating profit forecast amounts to 134.2 billion KRW. The contribution profit per unit for Kia Motors in the second quarter is estimated to have increased by 3% from a year ago to 5.62 million KRW.

Kia Motors' operating profit this year is expected to decrease by 46% from the previous year to 1.1 trillion KRW. Although the operating profit forecast was revised upward by 28.6% from the previous forecast reflecting changes in sales volume assumptions, it still falls short of the market consensus by 27%.

Researcher Seongjin Kang explained, "Kia Motors' sales volume excluding China is expected to increase by 17,000 units (0.7%) from the previous forecast to 2.3 million units," adding, "The adjustment in sales volume forecast corresponds to an increase of 92.6 billion KRW in the operating profit forecast."

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