April 23, 2024

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[THE INVESTOR] Hankook Tire will need more time to improve its earnings, said Eugene Investment and Securities on Oct. 1 maintaining a “hold” recommendation and 50,000 won (US$45.00) target price. 

Its stock price has increased 7.1 percent over the last month and 17.1 percent over the last 3 months, significantly higher than that of its global peers. However, the anticipated tire price hike will probably be limited to the US market and will be offset by the rise of commodities price. As the US has included tires and rubber products to the list of items for additional tariff, Chinese tires are subject to a 10 percent rise in tariff. Hankook Tire’s price hike will be due to heavier duties rather than from higher demand, said analyst Lee Jae-il.

The tire maker’s revenue in the third quarter will decline 1.4 percent on-year to 1.8 trillion won and operating profit by 8.9 percent to 198 billion won, he estimated, adding that while raw material prices are rising gradually, shipments and effect of price rise are failing to meet expectations. 

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