[Click eStock] "Kia Motors, Additional Growth Drivers Expected Based on High Margins"

Ebest Investment & Securities Report

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Ebest Investment & Securities on the 28th judged that Kia Motors has high investment attractiveness considering its record-breaking performance in the fourth quarter of last year and additional growth drivers such as electric vehicles (EVs), and raised the target stock price from the previous 75,000 KRW to 105,000 KRW. The investment opinion was maintained as 'Buy.'

Kia Motors recorded an operating profit of 1.28 trillion KRW in the fourth quarter of last year, an increase of 116.9% compared to the same period last year, marking an all-time high performance. This result significantly exceeded the consensus. Sales amounted to 16.9 trillion KRW, showing a 5% increase compared to the same period last year.

Yoo Ji-woong, an analyst at Ebest Investment & Securities, said, "Despite the negative exchange rate environment and losses from strikes, the effect of average selling price (ASP) and mix improvement generated about 493 billion KRW, greatly improving the operating profit margin," adding, "However, in the China business, about 168 billion KRW in losses occurred due to lineup reduction efforts."

High margins are expected to continue this year, manifesting additional growth drivers. New car lineups based on recreational vehicles (RVs), excluding the Sportage, have already started sales in major markets, and electric vehicles (EVs) and purpose-built vehicles (PBVs) are planned to be focused on in the second half of this year.

Analyst Yoo predicted, "Details on new businesses will be added at the upcoming CEO Investor Day," and "Meaningful momentum will begin in earnest from the second half of this year when the dedicated electric vehicle project CV is actually sold."

However, Analyst Yoo explained, "There are still variables such as delayed financial performance improvement in China and potential semiconductor shortages," and "In the short term, it is necessary to confirm sales performance exceeding forecasts to offset these."