[Click eStock] Kia Is a Growth Stock... Low-Price Buying Perspective Remains Valid

Hi Investment & Securities stated on the 6th that it maintains a Buy rating and a target price of 100,000 KRW for Kia. Based on the previous day's closing price of 81,300 KRW, the upside potential is 23%. Heeseung Cho, a researcher at Hi Investment & Securities, emphasized, "Despite the visible sustainability of strong earnings and a firm commitment to an active shareholder return policy, the 12-month forward P/E of 4.8 times is considered excessive, and the perspective of buying at a low price remains valid."

Concerns about demand slowdown due to the economic recession limited expectations for production normalization, but recently, as macro risks have eased, expectations for demand recovery have increased. Researcher Cho noted, "Considering the upward revision of target returns by vehicle segment and model over the past three years and the structural growth of profitability through mix improvement centered on SUVs, the past profitability improvements are judged not to be temporary factors as the market had worried."

Kia has presented a mid-to-long-term strategy for 2030 focusing on four areas: global sales expansion, acceleration of electrification, connectivity solutions, and synergy between PBV and autonomous driving.

The global sales targets are 3.2 million units in 2023 → 4.01 million units in 2026 (an increase of 150,000 units from the previous target) → 4.3 million units in 2030 (an increase of 300,000 units from the previous target). By 2030, expansion plans include 2.68 million units in major markets and 1.61 million units in emerging markets.

The electric vehicle sales targets are 258,000 units in 2023 → 1.005 million units in 2026 (an increase of 198,000 units from the previous target) → 1.6 million units in 2030 (an increase of 400,000 units from the previous target). Kia plans to establish a lineup of 15 models by 2027, with one additional EV derivative model for emerging markets compared to previous plans.

Starting with the EV9, Kia will equip 4th-generation batteries, and from 2025, aims to develop 5th-generation batteries that improve energy density by 50% and reduce costs by 40%. Additionally, Kia intends to build an electric vehicle lineup across all segments and has expressed willingness to equip low-priced models with LFP batteries. The joint venture with battery suppliers is currently in the final stages of detailed negotiations.

Kia plans to continue strengthening product competitiveness focusing on connectivity, autonomous driving, high-performance models, and differentiated design. This vision began to materialize with the EV9, which is equipped with SDV and Level 3 autonomous driving HDP. Kia aligns with Hyundai Motor Group’s overall direction, aiming to provide SDV for all models from 2025, partial Eyes-off and expanded autonomous driving top speed via OTA from 2024-2025, and Eyes-off capable HDP 2 from 2026. For PBV, starting with the Mid-PBV to be launched in 2025, Kia plans to build a full product lineup including autonomous Mid PBV robotaxis, Large PBV, and Small PBV. Furthermore, a dedicated PBV factory utilizing innovative manufacturing capabilities will be constructed at Autoland Hwaseong. Specific business goals, partnerships, and software solution demonstrations are scheduled to be announced in 2024.

The 2023 financial targets remain as initially presented: wholesale sales of 3.2 million units (+10.3%), revenue of 97.6 trillion KRW (+12.7%), and operating profit of 9.3 trillion KRW (+28.6%, OPM 9.5%). The profitability improvement reflects strong expectations for volume growth and mix/ASP improvement despite the burdens of exchange rates and rising costs. Researcher Cho stated, "The targets remain unchanged, but the difference is that concerns about achieving them have eased, considering still low incentives, increased residual values, and visible demand recovery."

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