[Asia Economy Reporter Song Hwajeong] Kumho Tire has been experiencing a significant decline for the second consecutive day following a return to losses in the third quarter of this year.
As of 9:57 AM on the 17th, Kumho Tire was trading at 4,620 KRW, down 355 KRW (7.14%) from the previous day. The stock had also fallen more than 6% the day before, dropping below the 5,000 KRW mark.
The poor third-quarter earnings appear to be dragging down the stock price. Although third-quarter sales increased by 9% year-on-year to 649 billion KRW, the company posted an operating loss of 54.5 billion KRW, turning to a deficit. Samsung Securities analyst Im Eunyoung stated, "Sales continued to recover, but losses were recorded due to labor cost litigation provisions and a sharp rise in transportation expenses," adding, "Transportation costs were 7% of sales in 2020, but increased to 10.4% (61 billion KRW) in the first quarter, 10.3% (65 billion KRW) in the second quarter, and 15.9% (103 billion KRW) in the third quarter of this year." Samsung Securities has lowered Kumho Tire's target stock price by 22% to 7,000 KRW.
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