[Asia Economy Reporter Park Soyeon] Hyundai Motor Securities has set a target price of 130,000 KRW and a buy rating for Kia.
According to FN Guide on the 2nd, Hyundai Motor Securities recently published a report forecasting that Kia will record an operating profit of 2.4 trillion KRW in the third quarter of this year, exceeding consensus estimates.
They analyzed that the favorable exchange rate, decline in incentives, and continued price increase trend, along with improved domestic shipments since July and expanded exports, likely maximized the exchange rate effect.
Although there are concerns about economic recession in major regions such as Europe, demand slowdown has not been confirmed by indicators. On the contrary, low inventory and slower-than-expected supply chain recovery have led to simultaneous continuation of depletion of backlog demand and price increase effects.
Jang Moonsoo, a researcher at Hyundai Motor Securities, said, "With stabilization of raw material costs, the profit and loss structure has further improved, expanding the attractiveness of undervaluation."
He explained, "Although uncertainty is increasing due to exclusion from the IRA subsidy list and growing concerns about economic recession, the level of backlog demand caused by long-term supply shocks remains very high."
He added, "Considering that the supply recovery speed is falling short of expectations and bottlenecks persist, concerns about oversupply and price declines are expected to be low until the first half of next year."
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