Kiwoom Securities Co. bought an investment opinion and maintained its target stock price of 130,000 ..

Kiwoom Securities Co. bought an investment opinion and maintained its target stock price of 130,000 won on the 14th, saying that damage is expected from Trump’s 2nd tariff policy, but related risks are already reflected in the stock price.

Kiwoom Securities predicted that Kia’s operating profit in the fourth quarter will rise 8.8% year-on-year to KRW 2.68 trillion, falling short of market expectations (KRW 3.2 trillion in operating profit).

Kia’s global wholesale sales in the fourth quarter rose 5.1% from a year earlier to 770,000 units, but it was not enough to achieve Kia’s annual global wholesale sales guidance of 3.2 million units in 2024. China (67.1% achievement rate) and India (87.5%) were the regions where the sales performance was significant compared to the annual business plan.

Kiwoom Securities predicted that whether Kia will achieve its annual operating profit guidance of 12.8 trillion won to 13.2 trillion won in 2024, which was upgraded through its third-quarter earnings announcement, will also be the key to the direction of stock prices.

Kiwoom Securities estimated an annual operating profit of 12.6 trillion won, which falls short of Kia’s guidance. It is explained that this is due to the increase in KRW-converted sales guarantee cost due to the weak wholesale sales volume and KRW at the end of the year, which were sluggish than expected in the fourth quarter.

Kiwoom Securities analyzed that the domestic automobile industry has been exposed to multiple related policy risks such as the Inflation Reduction Act (IRA) and tariffs since the fourth quarter of 2024 after Trump’s election, and there is still no clue to early resolution of policy risks.

Kia is operating a factory in Mexico, where Trump still insists on imposing tariffs. Kiwoom Securities also assessed that the task of Trump’s policy risks is more complicated than competitors in the same industry because the vehicle is planned later than Hyundai Motor to HMGMA (Hyundai Motor Group Metaplant America), a new U.S. plant that can immediately respond to tariffs by expanding production in the U.S.

However, Kiwoom Securities emphasized that the current policy risk is already largely reflected in Kia’s stock price, so if a clue to early resolution is confirmed in the future, the stock price is expected to expand.

In addition, unlike Hyundai Motor, which distributes dividends on a quarterly basis, Kia is likely to focus on Kia earlier this year, considering paying dividends at the end of the year, Kiwoom Securities analyzed.

“Kia will record the lowest operating profit and net profit of controlling shareholders in the fourth quarter of the year, and the earnings consensus is also expected to be lowered,” said Shin Yoon-chul, a researcher at Kiwoom Securities. “We consider diluting investment points during the earnings season, but maintain the target stock price because there is a possibility of inflow of investment demand for shareholders’ return after the earnings announcement.”