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. Given the solid fundamentals and Kia's role and share in the group's robotics business, there is significant 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 in key growth segments. Second-quarter sales are expected to reach 828,000 units, a 1.7% increase from the same period last year, with eco-friendly vehicle sales projected to grow by over 40%."
Kim also noted that while the expansion of eco-friendly vehicle sales is expected to improve the product mix and benefit from favorable exchange rates, rising raw material costs, increased annual R&D investments, and foreign exchange impacts related to sales guarantees could lead to a slight decrease in profitability compared to the previous year in the second quarter.
Looking ahead to the second half, Kim predicted that increased production of the Telluride in North America, expanded production of the Sportage HEV at HMGMA, and a rise in sales of affordable electric vehicles centered around the EV2 in Europe would continue to drive revenue and profit growth. He also highlighted the potential for a reevaluation of the value of Kia's robotics business as the group pushes for the commercialization of humanoid robots and seeks to secure additional stakes in the sector.
* This article has been translated by AI.
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