Hanwha Investment & Securities on the 7th analyzed that the trend of rising electric vehicle (EV) sales centered in Europe for Kia will continue through the second quarter. It kept its "Buy" investment opinion and raised the target price to 245,000 won from 240,000 won. Kia's previous trading day closing price was 151,600 won.
Kim Seong-rae, a researcher at Hanwha Investment & Securities, said of Kia, "First-quarter revenue this year will continue to set a new quarterly record," adding, "First-quarter global sales held up, rising 0.3% on-year to 774,000 units."
Kim assessed that this performance was driven by higher sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) this year,
Kim said, "Global HEV sales were 130,000 units, up 25% on-year," adding, "BEV sales, led by Europe, rose 53%, showing strength, and the improved product mix centered on eco-friendly vehicles (xEVs) contributed to first-quarter revenue growth this year."
However, U.S.-bound tariff and liability effects were cited as negative factors for operating profit. Kim said, "First-quarter operating profit this year is expected to show a decline, coming in at 2.2 trillion won, due to a tariff impact of 652 billion won, or 2.3% of revenue, and an increase in foreign-currency translation liabilities."
Future growth drivers were seen as coming from the effects of new model launches.
Kim explained, "In North America in the second quarter, we expect wholesale sales to turn to growth in the quarter through the launch of the Telluride model and mass production of the Sportage HEV at Hyundai Motor Group Metaplant America (HMGMA)."
He added, "In Europe, we confirmed the new-model effect by selling 6,000 units each of the EV4 and EV5 in the first quarter this year," and "With local mass production of 6,500 units of the EV2 starting on the in the last month, we expect a full-fledged increase in volume from the second quarter."