[Click eStock] Kia, Target Price Lowered Reflecting H2 Attractiveness

There is a forecast that if Donald Trump, the Republican candidate, is elected President of the United States, there could be disruptions in automobile exports to the U.S. Accordingly, Kiwoom Securities lowered Kia's target stock price from 150,000 won to 130,000 won on the 22nd, while maintaining a 'Buy' investment rating.

Shin Yoon-chul, a researcher at Kiwoom Securities, stated in a report released that day, "We are lowering the target price to reflect Kia's attractiveness in the second half of the year," adding, "If Trump wins the U.S. presidential election, there could be disruptions in automobile exports to the U.S., which is a major demand market for Kia's Mexico plant, so it is a time when communication regarding risk countermeasures is necessary."

He continued, "At the earnings conference call on the 25th, it is expected that Kia will announce the execution of an additional 250 billion won share buyback that was conditionally proposed, but due to strong first-half performance, related expectations have already been reflected in the stock price."

Kia's third-quarter sales are expected to record 25.2 trillion won and operating profit 2.82 trillion won, slightly below market expectations. Researcher Shin explained, "There was a clear decline in wholesale sales compared to the same period last year in the domestic market and Western Europe, while U.S. wholesale sales grew slightly but accompanied by an increase in dealer incentives due to the aging of volume models."

In the Indian market, where high growth was initially expected, the growth momentum is not expected to positively affect the stock price. Earlier this year, Kia set an annual wholesale sales target of 280,000 units for the Indian market, a 9.8% increase from the previous year, as part of its regional wholesale sales business plan.

Regarding this, Researcher Shin said, "Considering the local competitive landscape in India, we have evaluated the business plan as somewhat aggressive. Currently, Kia has recorded 193,000 units in wholesale sales in India as of the cumulative total in September," adding, "Since no new volume model launches are planned for the fourth quarter, achieving the business plan seems difficult, and the new car cycle is expected to start in January next year with the launch of the Seltos (AY)."

Researcher Shin also noted, "Of course, India is a market with low contribution to Kia's performance, so the negative impact from a consolidated profit and loss perspective will be limited. However, following the scheduled listing of Hyundai Motor's Indian subsidiary today, the growth momentum in India that will unfold across the group for the time being may not be fully reflected in the stock price."

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