Shinhan Investment Corp. raised the target stock price of Kia Motors Corp. from the previous 50,000 won (US$41.91) to 53,000 won (US$44.42) on Sept. 23. This is because it expects that the country’s second largest automaker will show improvement in performance in the second half of this year with a series of successful launches of new vehicles. It also maintains its “buy” opinion.
Chung Yong-jin, an analyst at Shinhan Investment, said, “The company’s new cars – the K7 launched in June, the Seltos in July and the Mohave to be released in September – are getting a favorable response from consumers. Its operating profit in the third quarter is expected to surge a whopping 320.1 percent to 492.70 billion won (US$412.89 million), surpassing the market forecast. The figure in the fourth quarter will also increase 47.1 percent to 562 billion won (US$470.96 million).”
He added, “The Seltos compact SUV sold 6,109 units a month and ranked first in terms of sales in the segment in just two months after the release. The Mohave the Master has already received more than 7,000 preorders. The K7 Premier also sold over 15,000 units in just two months.”
Chung also said, “Kia Motors showed good performance in the first half due to the revival in exports, including North America, and the weak won in the second quarter. As the favorable exchange rate environment continues and new models have launched, the recovery in domestic sales will improve the company’s performance in the second half.”
For the Indian market in where Kia Motors recently completed construction of its local plant and started sale and production of the Seltos, he added, “The company achieved its wholesale sales goal of 6,000 units last month and is receiving good initial response from consumers. So, it will address concerns over poor performance from the operation of its new overseas plant.”