[Click eStock] "Kia Awaits New Car Launch... Strong Earnings Expected"

Shinhan Financial Investment Report

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Shinhan Financial Investment maintained a buy rating and a target price of 115,000 KRW for Kia on the 11th, based on the expectation of strong earnings driven by the successful launch of new vehicle models.

It is forecasted that last year's fourth-quarter sales will reach 17.9 trillion KRW and operating profit 1.32 trillion KRW, representing growth of 6% and 2.8% respectively compared to the same period last year. Operating profit, however, fell about 12% short of market expectations (1.5 trillion KRW).

Researcher Yongjin Jung of Shinhan Financial Investment said, “After peaking in September last year due to the vehicle semiconductor shortage, a rapid production recovery was expected, but normalization proceeded more slowly than anticipated. Global wholesale sales in the fourth quarter (649,000 units) and wholesale sales excluding China (612,000 units) declined by 12.3% and 9.6% respectively compared to the same period last year, failing to meet market expectations.”

The newly launched Sportage (NQ5) and the first E-GMP model EV6 (CV), released in the second half of last year, have shown positive market responses. The accumulated undelivered units after domestic release have exceeded 80,000, securing their domestic popularity through this year. Additionally, global launches of two more models are expected to follow. According to company estimates, global sales of these two models are projected to exceed 500,000 units, which is a sharp increase from last year's sales volume of around 70,000 units, likely driving profitability improvements.

Upcoming new models include the Niro (scheduled for domestic release in January), and facelifted (partial update) versions of the Seltos, K5, and Ray (scheduled for domestic release in the second half of the year). Researcher Jung said, “These models have already succeeded globally in terms of product competitiveness,” adding, “The facelifted models are undergoing significant specification upgrades, diversification of options and trims, which is expected to contribute to an increase in average selling prices.”

Finally, Researcher Jung stated, “This year, Kia will focus on regional portfolios (U.S. and Europe) and product portfolios (new sedans and mid-to-large SUVs) to maintain high profitability,” and added, “If additional prospects for relatively less disclosed new businesses such as electric vehicles and purpose-built vehicles (PBV) are included, it will further confirm growth opportunities.”

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