[Click eStock] Kumho Tire Turns to Deficit Due to Lawsuits and Rising Logistics Costs
![[Click eStock] Kumho Tire Turns to Deficit Due to Lawsuits and Rising Logistics Costs](http://www.asiae.co.kr/news/img_view.htm?img=2021100809273658797_1633652857.jpg)
[Asia Economy Reporter Hwang Junho] Samsung Securities has lowered the target price of Kumho Tire to 7,000 KRW. The main reason is the turnaround to a deficit due to litigation costs related to labor and logistics expenses.
Kumho Tire recorded a loss in the third quarter of this year due to an increase of 20 billion KRW in litigation provisions and 63.8 billion KRW in logistics costs. Sales increased by 2% year-on-year to 649 billion KRW.
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Samsung Securities analyzed that despite the increase in product unit prices, the company's capacity to absorb costs is weak. Researcher Lim Eunyoung stated, "Although we expect a slowdown in logistics costs, reflecting a moderate pace, we lowered the earnings forecast and applied the existing EV/EBITDA multiple of 5.9 times to lower the target price."
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