Tuesday, January 14th, 2014
SEOUL, KOREA - Korea Investment & Securities said on January 14 that the share price of Kumho Tires has not be able to reflect the company's recent financial turnaround and improved financial standing. It maintained the tire company's investment opinion at "buy" while setting the target price at 16,000 won.
Korea Investment & Securities analyst Kim Jin-woo said, "The debt burden of Kumho Tires is falling rapidly. With the redemption of the bonds with stock purchase warrants and convertible bond conversion, its consolidated debt ratio is expected to decline to 288 percent this year from 765 percent in 2011. During the same period, the interest coverage ratio will rise to three times from one time."
Kim further said that the company's financial conditions will improve as its domestic market share rises and the capacity utilization climbs up. He estimated Kumho Tires' net profit to rise 123 percent in 2014. He was optimistic that the company would be able to graduate from the workout program by the year's end without difficulty.
