[THE INVESTOR] Kia Motors was slow in the second quarter but will gather momentum as it rolls out new cars, said eBEST Investment and Securities on July 17, maintaining a “buy” recommendation and 45,000 won (US$39.84) target price.

Its second-quarter revenue will fall 5.5 percent to 13.7 trillion won and operating profit 35 percent to 501.2 billion won from a year ago, as slow sales at home and in the US dragged down the bottom line, said analyst Yoo Ji-woong.

However, the automaker’s new models Stinger and Stonic, released in June and July, respectively, are considerably more popular than expected, and the subcompact SUV Stonic will sell more than 40,000 annually in Kia’s major market Europe, said the analyst. 

Despite the imminent push from new models, its stock is significantly undervalued due to China’s retaliatory actions over THAAD and lawsuits over wages, according to Yoo, who recommending to purchase the stocks before a final ruling on the 1-trillion-won lawsuit comes in August. 

By Hwang You-mee (glamazon@heraldcorp.com)