] HMC Investment and Securities on Oct. 12 predicted Kia Motors will post third-quarter operating profit of 5.16 trillion won (US$4.59 billion), down 33 percent on-year.
The brokerage, an affiliate of Hyundai Motor Group, estimated Kia’s sales to drop 13 percent on-year to 12.56 trillion won (US$11.17 billion).
The operating profit stands far below the market consensus of 6.37 trillion won.
“The decline is due to the termination of the tax cut on new car purchases that reduced domestic sales, unfavorable won-dollar exchange rate and ongoing strike,” Lee Myung-hoon, analyst at HMC Investment Securities said.
Lee forecast Kia Motor will recoup from the loss in the fourth quarter to post a combined 2.48 trillion won in operating profit for 2016.
The brokerage maintained a “buy” recommendation and a target price of 63,000 won, citing the popularity of SUVs and increasing production at Kia’s auto plant in Mexico.
By Ahn Sung-mi (firstname.lastname@example.org