The rise in raw material prices will not be a burden for most global tire makers, including Nexen Tire, as they have raised prices much higher than expected, said Shinhan Financial Investment on Jan. 11.
The securities firm raised the South Korean tire maker’s target price to 18,000 won (US$14.99) from 17,000 won and maintained a “buy” recommendation.
Nexen Tire’s revenue is focused on advanced countries and China only accounts for 2 percent, so it should be compared with global tire manufacturers, added analyst Jeong Yong-jin.
Its fourth-quarter operating profit will slip 1.6 percent to 65.1 billion won on-year, but its profitability remains decent thanks to the increased sales of sport utility vehicles and favorable exchange rate, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)