[Click eStock] "Kia's 350 Billion Won Treasury Stock Cancellation, Expectation of Reduced Volatility After Ex-Dividend"

Solid Sales Performance Continues Amid High Exchange Rates
CEO Investor Day Event Scheduled After Ex-Dividend Date
Expectations for Early Reduction in Volatility Increase

Kia announced a 350 billion KRW share repurchase and a quiet period disclosure. Although short-term stock price volatility is expected to increase around the dividend record date on the 19th, it is analyzed that the stock price decline can be defended through the CEO Investor Day event scheduled for early next month.

On the 17th, based on this background, the investment opinion on Kia was maintained as 'Buy' with a 6-month target price of 150,000 KRW. The closing price on the previous trading day was 99,500 KRW.

On the 14th, Kia disclosed a share repurchase plan worth 350 billion KRW, equivalent to 0.9% of the market capitalization on that day. The repurchase will take place from the 20th until June 11th, with a plan to strategically cancel the shares in the third quarter of this year. This amount corresponds to half of the annual share repurchase scale of 700 billion KRW announced earlier this year as part of the shareholder value enhancement plan.

The dividend record date is on the 19th. On that day, a year-end dividend of 6,500 KRW per share (a dividend yield of 6.5%) will be paid. Accordingly, there is a possibility that stock price volatility will increase in the short term due to the ex-dividend date on the 18th. On the ex-dividend date last year, the stock price fell by 7% but rose about 8% one month later.

This year, stock price defense is expected through the CEO Investor Day event scheduled for next month. The daily order quantity limit for this share repurchase is about 349,000 shares, which amounts to approximately 35 billion KRW based on the closing price of 104,000 KRW on the day before the board resolution.

Kim Gui-yeon, a researcher at Daishin Securities, explained, "In February, Kia maintained a solid sales trend centered on North America, and the burden on first-quarter earnings was limited due to the high exchange rate situation. If volatility expands due to the ex-dividend date, it is necessary to pay attention from the perspective of buying at the bottom."