Shinhan Investment Corp. announced on July 9 that it has raised its target price for Kia from 220,000 won to 240,000 won, a 9% increase, citing that the value of robotics and software-defined vehicles (SDV) has not been fully reflected in the stock price. The firm maintained its 'buy' rating.
Park Kwang-rae, a researcher at Shinhan Investment, stated, "Like Hyundai Motor, Kia has connections to robotics and SDV through its indirect stake in Boston Dynamics via HMG Global, the introduction of Atlas at its Georgia plant, and the planned SDV launch in 2028." He added, "As simple narratives gradually materialize, the discount rate compared to Hyundai is expected to narrow over time."
He also projected that Kia's second-quarter earnings would exceed market expectations. Park estimated an operating profit of 2.9 trillion won for the second quarter, a 5% increase from the same period last year, attributing this growth to increased sales volume, improved product mix, and rising average selling prices (ASP).
Park identified the expansion of hybrid electric vehicle (HEV) sales in the U.S. as a key growth driver. He noted, "The biggest upside factor for the second-quarter results is the strong sales of HEVs in the U.S. The Telluride has an HEV share exceeding 55%, and in the second half of the year, the addition of Sportage HEV sales, which began mass production at HMGMA, is expected to raise the HEV share in the U.S. to around 30% this year."
While he pointed out that increased incentives in Korea and Europe, rising raw material and research and development (R&D) costs, and the expanding impact of U.S. tariffs are negative factors, he still anticipates that positive factors will outweigh the negatives in the second quarter.
* This article has been translated by AI.
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