The average target price of 000270.KS is 137403 and suggests 24% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 179000.0. This translates into 62% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 105000.0. This is equivalent to 5% downside potential in the worst case. 

Kia Corporation, together with its subsidiaries, manufactures and sells vehicles in South Korea, North America, and Europe. The company offers cars, SUVs and MPV, eco, and commercial vehicles. It sells its products through a network of dealers. It has a strategic partnership with Factorial Inc. to jointly develop solid-state batteries for next-generation electric vehicles. The company was formerly known as Kia Motors Corporation and changed its name to Kia Corporation in January 2021. Kia Corporation was founded in 1944 and is based in Seoul, South Korea.

Korea

Kia Corporation

Consumer Cyclical

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. On average, the company pays dividends annually. 

000270.KS reported revenue of KRW 109 253 411mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 4% from FY24 to KRW 23 592.30. Market expects EPS to reach KRW 25 846.01 in FY25.

Over the past six months, the stock has consistently climbed, resulting in 8% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 3ppts in total. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 6ppts and accelerated its growth by 11ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.7% in the last 12 months, a decline from 14.0% in FY23. 

Historically, 000270.KS has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.6%, down from 8.8% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 10.8% in the last 12 months, a decrease from 11.4% in FY23. The market analysts predict that RoA will be 11.4% in FY24, again stronger than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 15.5%, above the peers. The consensus estimate for FY24 for RoCE is 22.2%, again ahead of the peers. 

Kia Corporation reported a return on equity (RoE) of 18.3% in the last 12 months, down from 20.4% in FY23. The market consensus projects an RoE of 19.5% in FY24, again ahead of its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.9 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

000270.KS boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and is average on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is minimal. We note strong positions in its industry, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to poor working capital management.

In highly turbulent market conditions, 000270.KS is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 000270.KS is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to minimal. We would also like to highlight the minimal intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

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Kia Corporation

₩ 109900

7

Kia Corporation

₩ 109900

7

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Risk factor

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₩ 109900

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