Hanwha Investment Securities announced on June 18 that it is raising its target price for Kia from 245,000 won to 290,000 won, reflecting the company's expansion in eco-friendly vehicle sales, the impact of new models in the second half of the year, and the potential for a reevaluation of its robotics business. The firm maintained its investment rating at 'Buy.'
Kim Sung-rae, a researcher at Hanwha Investment Securities, stated, "The recovery in regional volumes and improvements in product mix confirmed in the first half will accelerate in the second half. Considering the solid fundamentals and Kia's role and significance in the group's robotics business, there is considerable upside potential."
He added, "Despite a slowdown in global market demand and a fire at a partner company in the second quarter, Kia is minimizing the negative impacts of the market environment through expanded sales of HEVs and BEVs focused on regional growth segments. The second-quarter sales volume is expected to reach 828,000 units, a 1.7% increase compared to the same period last year, with eco-friendly vehicle sales projected to grow by over 40%."
Kim also noted, "The expected improvement in product mix due to the increased share of eco-friendly vehicles and favorable exchange rates will likely lead to significant revenue growth. However, rising raw material prices, increased annual R&D investment, and foreign exchange translation losses related to sales guarantees may cause a slight decline in profitability compared to last year in the second quarter."
Looking ahead, Kim predicted that in the second half of the year, increased production of the North American Telluride and the Sportage HEV, along with a rise in sales of budget electric vehicles centered on the European EV2, will continue the trend of revenue and profit growth. He also highlighted the potential for a reevaluation of the value of Kia's robotics business, driven by the group's push for humanoid commercialization and the possibility of securing additional shares in BD.
* This article has been translated by AI.
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