[Special Stock] Kumho Tire Hits 52-Week High... Highlights Best Q1 Performance in 10 Years

Q1 Operating Profit 145.6 Billion Won, Highest in 10 Years
Vietnam Factory Expansion Drives Strong Performance
Expectations for 20% Production Capacity Increase with European Market Entry

Kumho Tire broke its 52-week high for the first time in over two months on the 30th. This is interpreted as reflecting the previous day's 'earnings surprise' and expectations for future performance.

As of 9:18 a.m. on the 30th, Kumho Tire was trading at 7,230 KRW, up 7.27% (490 KRW) from the previous day. This surpassed the previous 52-week high of 6,880 KRW recorded on February 19. After the stock price had fallen to the mid-5,000 KRW range since February, Kumho Tire showed a recovery trend and shifted to a clear upward trend following the earnings announcement.

The day before, Kumho Tire was the first among the three domestic tire companies to announce its first-quarter earnings. Sales were 1.045 trillion KRW, and operating profit was 145.6 billion KRW. This was an 'earnings surprise' exceeding the market consensus (average forecast) by 18%. The operating profit margin was 13.9%, marking the highest first-quarter performance in the past 10 years. Compared to the same period in 2022, sales increased by 4.5%, and operating profit rose by 167.1%. Kumho Tire cited the ‘expansion of original equipment (OE) tire supply and the complex growth of the replacement (RE) tire market, including high-profit tires’ as the background for this quarter’s performance.

Jung Yong-jin, a researcher at Shinhan Investment Corp., said, “The proportion of large-diameter tires in Europe also increased to 32.5%, driving an improvement in the large-diameter mix.” He added, “Although there were increases in freight and costs, the expansion of sales focused on high-profit products accelerated further, so high profitability was maintained without the need for price hikes.” Researcher Jung also noted, “The effect of the Vietnam plant expansion has been driving volume since the beginning of the year.” He explained, “We are responding to the North American market through production bases with cost competitiveness, and margins exceeding consolidated profitability are expected. Once the early stabilization of the Vietnam plant is confirmed, entry into Europe will become visible.”

Investment in a new European base is expected to begin, targeting completion in 2027. Once the European capacity of 12 million units is established, global production capacity is expected to expand from the current 62 million units to 74 million units.