[Click eStock] "Kia, Most Undervalued Global Auto Stock... Russia Concerns Overstated"

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities stated on the 2nd that Kia is currently undervalued at 5.2 times this year's price-to-earnings ratio (PER), maintaining a target price of 130,000 KRW and its status as the top preferred stock in the sector.

Kim Min-seon, a researcher at Kiwoom Securities, said, "(Kia) effectively defended profitability despite disruptions caused by the semiconductor supply shortage last year, and the scope of performance improvement this year is expected to be relatively large. However, the current stock price is the most undervalued among global competitors," adding, "Although the recent stock price has fallen due to concerns over the escalation of the Russia-Ukraine conflict, considering that the operating profit contribution from the Russian region is less than 5%, such concerns are considered excessive."

Kia's annual operating performance this year is expected to improve due to sales recovery following the normalization of parts supply. Since the second half of 2020, strong performance in India, the Asia-Pacific, and the U.S. regions has driven results, and as market dominance in these regions remains unchanged, performance improvement from sales recovery is expected to continue.

Researcher Kim said, "Now the focus should be on production recovery and sales normalization," adding, "March production is expected to increase by about 10-15% compared to January and February, and sales will sequentially recover accordingly."

He also stated, "The parts supply shortage passed its bottom point in the third quarter of last year and will show continuous improvement throughout the year," and forecasted, "The company decided on a dividend of 3,000 KRW per share last year, maintaining the promised dividend payout ratio of 25%, and future shareholder returns will also be proportional to performance."

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