Kia's Worst May "Only 2 Days Off"... Strong Demand 'Target Price 120,000 Won'

[Asia Economy Reporter Lee Seon-ae] Shinhan Financial Investment maintained its investment opinion of 'Buy' and target price of '120,000 KRW' for Kia. The target valuation for this year's earnings per share (EPS) applied the average price-to-earnings ratio (PER) of 11.1 times from 13 global automakers.

On the 30th, Jeong Yong-jin, Senior Researcher at Shinhan Financial Investment, stated, "Many investors feel burdened by concerns over supply disruptions that began early this year affecting Kia's annual performance," adding, "From the third quarter, supply normalization is expected to recover losses, and the continued success of newly launched models means deferred demand remains solid."

After the first quarter earnings announcement, market attention focused on Kia's sales volume in May and June, as this period was considered the peak of the semiconductor shortage for domestic automakers. Until the end of May, Kia decided on two days off at the Sohari Plant 2 (May 17?18) and two days off at the Georgia Plant (May 27?28). Considering that competing overseas automakers recorded monthly production cuts of 30,000 to 40,000 units, Kia appears to be maintaining its strong first-quarter performance. Researcher Jeong explained, "By June, we will be able to confirm the favorable May sales volume," and added, "Additional vehicle semiconductor supplies, centered on Taiwan's TSMC, will be released to the market, signaling a resolution phase for concerns over supply disruptions in the first half."

U.S. sales in April reached 70,000 units (+121.3% YoY), marking the highest market share ever at 4.64%. Even in segments with weak demand such as the K3 and K5, high sales volumes were recorded. Popular segments like Telluride and Sorento continue to experience strong demand with supply shortages. Researcher Jeong emphasized, "In the case of the Telluride S trim, an abnormal situation has been observed where used car prices are about $10,000 higher than the new car MSRP of $38,540," adding, "This confirms a highly profitable environment once supply normalizes."

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