April 27, 2024

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[THE INVESTOR] Hankook Tire will show improved earnings as the US market enters a virtuous cycle and competition in the domestic market eases, said Samsung Securities on March 8, raising the target price to 72,000 won (US$67.33) from 67,000 won.

Its factory in the US will turn to black as the operation ratio rises, and its market share in Europe has doubled over the last eight years, noted analyst Im Eun-yeong.

Competition in the domestic market has eased as rival Kumho Tire deals with worsening financial health, said the analyst adding that Hankook Tire is considering more M&A deals in addition to acquiring stakes in Hanon System and overseas distribution network. 

It also is seeking to provide maintenance service to distributors and transportation companies, and in the future also tie-up with finished carmakers for data on automobile conditions and maintenance, according to Im.

The landscape of tire industry will change as self-driving technology progresses along with changes in car power source. Armed with highly competitive prices, diverse client base and expanding network, Hankook Tire will benefit, she added.

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