[EQUITIES] ‘Kia may gain regardless of wage suit outcome’
[THE INVESTOR] The ruling on Kia Motors wage suit will be positive regardless of the outcome as it will clear uncertainties, said IBK Investment and Securities on July 25, maintaining 51,000 won (US$45.72) target price.
The first verdict will be on Aug. 17, and if the company loses the 660 billion won lawsuit, it will suffer temporarily to secure appropriation fund, but when it is reflected from the third quarter, its stock price may begin to recover gradually, said analyst Lee Sang-hyeon.
Meanwhile its second-quarter earnings will miss market expectations, as revenue will fall 2.7 percent on-year to 14.05 trillion won and operating profit by 30.1 percent to 538.9 billion won, said the analyst.
Lee maintained a “buy” recommendation, however, saying that in addition to a low baseline in the latter half, its release of new models in Korea and China combined with gradual improvement in sales will bolster it.
By Hwang You-mee (glamazon@heraldcorp.com)