[Click eStock] "Kia Motors Beats Q2 Earnings Consensus... Strong New Model Effect Supports Performance"

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities evaluated that Kia Motors' second-quarter performance this year exceeded market consensus. Although the global sales decline due to the impact of the novel coronavirus infection (COVID-19) and sluggishness in emerging markets such as India and Mexico had a significant effect, the new car effect and domestic sales served as a support, the company analyzed on the 24th.

Kia Motors' second-quarter sales and operating profit this year were 11.3688 trillion KRW and 145.2 billion KRW, respectively, down 21.6% and 72.8% compared to the same period last year.

Domestic sales in the second quarter grew significantly by 26.8% year-on-year to 162,000 units due to the new car effect of key models such as the K5, K7, and Sorento. The proportion of domestic sales revenue to consolidated revenue in the second quarter was about 38.1%, which is a significant increase compared to 22.3% in 2019 and about 20.3% in the first quarter. The average domestic sales price in the second quarter reached 26.8 million KRW, marking the highest quarterly figure.

Researcher Jo Su-hong explained, "Although the growth trend of domestic sales is expected to slow down after the second quarter, considering the favorable new car demand trend and the launch of the Carnival in the third quarter, the upward trend in sales prices is also expected to be maintained."

Sales revenue of the Indian subsidiary in the second quarter was about 250 billion KRW, sharply declining from 862 billion KRW in the first quarter. Researcher Jo assessed, "However, in the Indian market, waiting demand for the Seltos has been secured, so if the market situation stabilizes, achieving this year's business plan (165,000 units) should be smooth."

In the second half of the year, the effect of increased production of the Telluride and the recovery of the operating rate of the Indian plant are considered positive factors. Additionally, the full-scale export of new cars is expected to improve export ASP.

Researcher Jo stated, "In the domestic market, with the launch of the Carnival and Sportage, and the global launch of the four main models (Sorento, K5, Carnival, Sportage) all completed by 2021, a snowball effect from the cumulative new car effect is expected in terms of profitability."

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