Kumho Tire (photo = Yonhap news)

[Alpha Biz= Reporter Kim Minyoung] Hi Investment & Securities raised its target price for Kumho Tire to 9,500 won from 8,500 won. Despite the increase in raw material prices, stable performance is noticeable. The investment opinion remained 'buy'.

"Kumho Tire is renewing its highest performance ever with an operating profit ratio (OPM) of 13.9% in the first quarter of this year," Hi Investment & Securities said on the 21st. "Institutional investors are maintaining positive performance in the second quarter, which will add favorable exchange rate conditions," said Hi Investment & Securities on the 21st.

However, the current main concern is the possibility of profit reduction in the second half of the year, and Kumho Tire is expected to be relatively attractive in cost stability.

"The price of raw materials, which began to rise in November last year, will be reflected in May this year with a time lag, but in the case of Kumho Tire, the difference is that its Vietnamese plant with low manufacturing costs will be added annually this year," said Hi Investment & Securities Co. "Stable performance is leading to improved financial structure and reduced interest costs," Hi Investment & Securities said.

Analysts say that the momentum for performance improvement remains sequentially even after the plant in Vietnam.

"We expect to improve our performance this year thanks to increased production caused by Vietnamese plants and improved mix," said Hi Investment & Securities Co. "This trend is expected to lead to the expansion of European plants in 2028 after stable performance with the arrival of demand for replacement of electric vehicle tires from 2025."

 

 

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