[Click eStock] "Kia Raises Shareholder Return Rate to 35%"

Korea Investment & Securities forecasted on the 4th that Kia will continue its policy of expanding shareholder returns despite the change in its Chief Financial Officer (CFO).

Kia Telluride

Kia announced its shareholder return policy and mid-to-long-term profitability targets the day before. It raised the total shareholder return ratio (TSR) from 30.7% to 35%, increased the lower bound of the dividend payout ratio range from 20-35% to 25% or more, and set a minimum dividend per share at 5,000 won. At the same time, it set profitability targets including an average annual sales growth of over 10%, an operating profit margin of over 10%, and a return on equity (ROE) of over 15% from next year through 2027.

Changho Kim, an analyst at Korea Investment & Securities, said, "A TSR of 35% is at the same level as Hyundai Motor," and predicted, "The amount of share buybacks and cancellations will increase from 500 billion won annually to about 1 trillion won next year." He also analyzed, "If the amount of share cancellations is converted into dividends, the expected dividend yield next year will be 9.7%, which will be the highest level within the Hyundai Motor Group."

Analyst Kim added, "Joo Woo-jung, who served as Kia’s Head of Finance for six years starting in 2019, grew Kia’s performance to an all-time high and then moved to become CEO of Hyundai Engineering," and said, "He also left a major achievement in shareholder return policy through share buybacks and cancellations corresponding to the performance." He observed, "From next year, CFO Seungjun Kim will be appointed and will actively support shareholder returns," and predicted, "There will be no change in the policy to strengthen shareholder returns despite the CFO replacement."