April 27, 2024

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[THE INVESTOR] Kumho Industrial’s announcement that it will repurchase its own stocks worth 10 billion won (US$8.86 million) demonstrates the management’s will to prioritize restoring share price and shareholder values, said Kyobo Securities on Sept. 19. 

Its stock price hit a low this year following the fiasco regarding sale of Kumho Tire in July, and the repurchase of approximately 1.14 million shares will contribute to decreasing the volume of stocks traded and stabilize the price, said analyst Baek Gwang-je.

Kumho Tire’s self-help plan stated that affiliates will not participate in the capital raise and cleared the uncertainties for Kumho Industrial, noted the analyst. 

Meanwhile, as of this month it has already reached its 1.8 trillion won annual target amount for new orders, said Baek. The analyst underlined that it is significantly undervalued, especially when considering that its current total market is 320 billion won while its stake in Asiana Airlines alone is worth 300 billion won. 

Baek did not suggest a recommendation or a target price. 

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