[Click eStock] "Kia Motors, Anticipating Effects of New Domestic and Overseas Car Launches in the Second Half"

[Asia Economy Reporter Eunmo Koo] IBK Investment & Securities analyzed that Kia Motors is worth expecting the effect of new domestic and overseas car launches in the second half of the year.

Kia Motors' sales in the second quarter of this year were 11.4 trillion KRW, down 22% compared to the same period last year, and operating profit was 145.2 billion KRW, down 73%. Although it was worse than the same period last year, it exceeded consensus expectations. Lee Sang-hyun, a researcher at IBK Investment & Securities, explained in a report on the 27th, “The cost of goods sold ratio increased by 0.9 percentage points year-on-year to 84.8% due to increased fixed cost burden from volume decline, but it exceeded market expectations through expansion of high-profit models sales and cost reduction efforts. It is understood that the India plant, which is still in the early operating phase, also defended profitability at the break-even point (BEP).”

It is evaluated that the effect of new car launches domestically and internationally in the second half of the year is worth expecting. Kia Motors stated that the first half is expected to be in the high 80% range compared to the existing business plan, and the second half is expected to be at 100%. The researcher analyzed, “There is a positive signal showing results ahead of the revised business plan in July performance, and efforts to reduce fixed costs through new car effects and productivity improvement are expected. The effect of new car launches such as Sorento, Carnival, and Sportage is expected in the domestic market in the second half.” He added, “In the U.S., an increase in Telluride production (from 80,000 to 100,000 units) is expected, and the India plant will introduce Carnival from the third quarter following the existing Seltos, and Sonet is scheduled to be introduced in the fourth quarter.”

The investment opinion and target stock price were maintained at “Buy” and 45,000 KRW, respectively. The researcher forecasted, “Although the market environment in the second half is challenging, it is expected to continue improving performance by outperforming in sales compared to the market. In terms of cost ratio, the profitability defense capability is lower than Hyundai Motors, but considering the positive sales effect in the domestic market, profitability improvement can be expected if the overseas segment, which was sluggish, improves.”

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