Securities Market's Perspective on Kia's Confidence in Achieving 100 Trillion Won Market Capitalization Growth

[Asia Economy Reporter Lee Seon-ae] The securities industry has responded positively to Kia's growth strategy aiming for a market capitalization of 100 trillion won by 2026. This is seen as a growth strategy based on confidence in performance.

According to the financial investment industry on the 5th, many maintain a buy rating on Kia as the top preferred stock in the sector. Target prices are set at 135,000 won by Korea Investment & Securities, 120,000 won by IBK Investment & Securities, 115,000 won by Samsung Securities and Shinhan Financial Investment, 110,000 won by Hana Financial Investment, and 100,000 won by Hanwha Investment & Securities. They evaluate Kia's growth strategy as demonstrating confidence in its performance.

Park Yeon-ju, a researcher at Mirae Asset Securities, said, "Kia maintained its operating profit forecast of 6.5 trillion won this year," adding, "A significant portion of the sales decline in Russia can be compensated by sales in other regions, and the impact of currency depreciation in emerging markets will be offset by the weakening of the Korean won." She further stated, "Kia holds a competitive edge in terms of product competitiveness and market responsiveness, and the impact on performance due to the Russia issue will be limited," noting, "The recent adjustment has increased price attractiveness."

Kim Jin-woo, a researcher at Korea Investment & Securities, said, "Despite intensified competition, rising costs, and external adversities such as Russia, Kia will continue profit growth through structural improvements," and added, "There is visible confidence in structural performance improvement."

Lee Jae-il, a researcher at Eugene Investment & Securities, said, "Despite macroeconomic variables, Kia has reaffirmed the possibility of achieving this year's performance targets and positively evaluated the concrete presentation of strategies to strengthen electric vehicle profitability and differentiate purpose-built vehicles (PBV). He also praised the simultaneous pursuit of long-term growth enhancement and shareholder value improvement based on improved profitability."

Lee Sang-hyun, a researcher at IBK Investment & Securities, emphasized, "The 100 trillion won market capitalization by 2026 is based on an operating profit of 10 trillion won and a price-to-earnings ratio (PER) of 10 times," adding, "It is positive that Kia has presented a corporate value vision based on confidence in its performance."

Meanwhile, on the 3rd, Kia held the '2022 CEO Investor Day' and announced a mid-to-long-term goal to build a lineup of 14 electric vehicle models and sell 1.2 million electric vehicles globally by 2030 as part of its transition to a 'sustainable mobility solutions company.' Financial targets for 2026 include sales of 3.86 million units, revenue of 120 trillion won, operating profit of 10 trillion won, and market capitalization of 100 trillion won.

The electric vehicle sales target has been raised. The targets are 110,000 units in 2021, 160,000 units in 2022, 810,000 units in 2026, and 1.2 million units in 2030. The 2026 target was raised by 40% and the 2030 target by 36% compared to the plan announced in 2021. The proportion of electric vehicle sales is projected at 4% in 2021, 21% in 2026, and 30% in 2030.

Regarding structural improvement in profitability, three factors were presented: product competitiveness, pricing policy, and electrification profitability. The 2022 operating profit guidance of 6.5 trillion won is highly likely to be achieved.

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