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 "buy" rating.
Kim Sung-rae, an analyst at Hanwha Investment Securities, stated, "The recovery in regional volumes and improved mix centered on eco-friendly vehicles confirmed in the first half will accelerate in the second half. Considering 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 impact of market conditions through expanded sales of HEVs and BEVs focused on 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 noted that while the expansion of eco-friendly vehicle sales is expected to improve the product mix and positively impact revenue due to favorable exchange rates, profitability in the second quarter may slightly decline compared to the previous year due to rising raw material costs, increased annual research and development investments, and foreign exchange losses related to sales guarantees.
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 affordable 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 the business.
* This article has been translated by AI.
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