[Click eStock] "Kumho Tire, Strong 1Q Performance Driven by Europe and China"

On the 30th, KB Securities evaluated Kumho Tire as having recorded solid performance in the first quarter, with increased sales in Europe and China offsetting a decline in sales in Korea.

Researcher Kim Hyun-gyeom stated, "The preliminary consolidated sales for the first quarter increased by 4.6% year-on-year to 1.045 trillion KRW, and operating profit rose by 167% to 145.6 billion KRW," adding, "The operating profit margin (OPM) was 13.9%, and net income attributable to controlling shareholders was 87.3 billion KRW."

He further explained, "Sales showed a solid increase as the expansion of sales in Europe and China offset the decline in Korea," and noted, "Profitability was driven decisively by increased sales of tires sized 18 inches and above, as well as electric vehicle (EV)-dedicated tires, along with a cost of sales ratio of 69.5%." The cost of sales ratio decreased by 8 percentage points.

By region, particularly strong results were recorded in Europe and China. European sales rose 13.3% year-on-year to 277.6 billion KRW, accounting for 26.6% of total sales. The share of tires sized 18 inches and above reached 32.5%. In China, sales increased by 13.7% to 73.2 billion KRW, representing 7% of total sales. The share of tires sized 18 inches and above was 45.7%.

Key points to look forward to in 2024 include stabilizing production and increasing efficiency following the expansion of the Vietnam factory. Through the launch of the EV-dedicated brand 'EnnoV,' the share of EV tires is expected to expand to over 16%.

Researcher Kim said, "On January 9th, the National Assembly plenary session passed an amendment to the ‘Framework Act on National Land Planning and Utilization,’ which includes the creation of ‘Spatial Innovation Zones’ that relax urban planning regulations limiting land use and density based on land function." He added, "Going forward, local governments will be able to freely set floor area ratios and building coverage ratios without restrictions on land and building use for industrial land, which is expected to give strong momentum to Kumho Tire’s Gwangju factory relocation project."