---
endpoint: analytics
pattern: Autos
status: done
latency_ms: 281919
conversation_id: c1a68a1c-c9b2-4919-8f64-b27256d81ee2
citations: 19
created: 2026-05-31 19:40:36Z
---

# Provide a one‑year narrative of Kia, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Kia Corp (000270 KS) — A One-Year Narrative (Jun 2025 – May 2026)

## Setting the Stage — Mid-2025: Tariff Shock Disrupts a Healthy Franchise

Kia entered the period as a high-margin, high-cash Korean OEM that the sell-side rated constructively but with a discounted multiple. CLSA's transfer-of-coverage note on 16 May 2025 carried Kia at **Outperform with a ₩105,000 target price against a share price of ₩92,000**, alongside Hyundai Motor and the broader auto-parts complex [1][2]. The thesis was straightforward: a competitive lineup, double-digit operating margins, robust net cash, and rising shareholder returns — but it was about to collide with a tariff regime that would dominate the next twelve months.

Management confirmed the shock was concrete. On the Q2 2025 call, Kia disclosed that **"we started to get impacted from the tariff impact starting in May and June"** and that the company had not yet actively responded; mitigation steps were targeted to ramp in H2, with **25%–30% offset of the tariff impact** expected via duty drawbacks, production base adjustments, and reduced incentives [3]. Management also raised the bar on the US franchise: despite an anticipated ~10% drop in US industrial demand, Kia guided to **retail sales up "seven to 8%"** in H2, anchored on a hybrid lineup ramping from ~70% to 100% supply availability [4].

## Q3 2025 — The Quantified Trough

Q3 turned the qualitative warning into a hard number. The Q3 management deck attributed a **−₩2,020 billion hit to YTD operating profit from "U.S. Tariff Impact (25% tariff on imported vehicles & parts)"** as the single largest detractor, with incentive increase (−₩1,052bn), mix (−₩702bn), and other cost (−₩742bn) compounding the drag. A favorable FX (USD/KRW +4.4%, EUR/KRW +7.5%) added back ₩1,131bn, but YTD OP still fell to ₩7,236bn from ₩9,951bn in the year-ago period [7].

Underneath the P&L pressure, the demand signal was constructive:

- **US sales +11.1% YoY in Q3, outpacing industry growth** "driven primarily by strong performances from the Sportage HEV and Carnival HEV," with market share expanding to **5.3%** [5].
- **Electrified vehicle sales +32.3% YoY to 204,000 units** globally, with the EV mix rising to **26.4%** of group volume — HEVs led by the Carnival, EVs led by the EV3/EV4 [6].
- IRA-expiration-driven EV pull-forward propped up US EV demand into late September.

Management explicitly labelled the period the bottom — **"Our trough was in Q3 2025, but we have turned around in our recovery stage for Q4 2025"** — and set up the narrative pivot to FY26 normalization [9].

## Q4 2025 / FY25 Print (28 January 2026) — A Disappointing Headline But Constructive Guidance

The full-year print was the inflection point investors had been waiting for, and it came in mixed:

| Item | Result | Reference |
|---|---|---|
| Q4 2025 Operating profit | **₩1.843T** vs StreetAccount **₩1.873T** (miss) | [12] |
| FY2026 Revenue guidance | **₩122.3T** vs FactSet consensus **₩120.6T** | [13] |
| FY2026 OP target | **₩10.2T**, **+₩1.1T YoY**, **8.3% margin** | [8] |
| FY2025 year-end DPS | **₩6,800** vs prior year **₩6,500** | [11][21] |

Key qualitative takeaways from the call:

- **A 15% US tariff has been baked into the FY26 plan** as the new assumed run-rate: *"despite the application of a 15% U.S. tariff and an expected increase in incentives amid the intensifying competition, Kia will pursue robust top-line growth driven by ambitious volume growth targets and ASP improvements"* [8].
- **Volume drivers for FY26**: a full model change of the Telluride — **"the first time in seven years, the Telluride model has been newly released"** — plus a Telluride HEV, Carnival HEV ramp, Seltos refresh, and completion of the mass-EV lineup (EV2, EV3, EV4, EV5) in Europe [10].
- **Capital return reaffirmed**: management restated the three-year **35% TSR** commitment and underscored continuity by lifting DPS from ₩6,500 to ₩6,800 — *"our fundamental policy towards our shareholders and our promises to our shareholders should be met regardless of these external headwinds"* [11].
- Yuanta Securities Korea upgraded Kia to **Buy** from Hold on the same day the print landed (share price ₩149,700), signalling the Street was treating Q4 as the last weak quarter [14]. Separately, a **Korea-Canada MOU** announced 28 January framed a possible USMCA-friendly North American production hedge into the longer term [20].

The post-print price (₩151,850 — [21]) reflected a market that was disappointed by the Q4 miss but willing to look through to FY26 normalization.

## February 2026 — The Sentiment Snap

February delivered the sharpest one-day price reaction of the year, and it was driven by a production-milestone signal rather than financials. On 25 February 2026, Kia hit a **5 million HEV production milestone at its Georgia plant** and the stock surged **+₩23,300 to ₩197,300** intraday — a single-session move of more than 13% [15]. The implication that local US production was scaling fast enough to materially blunt tariff exposure was treated as a regime-changer for sentiment.

That move sat in the context of softer monthly volumes — February global sales of ~247K units were below the year-ago — but the production-domesticization narrative dominated.

## April 2026 — CEO Investor Day and a Q1 Miss

The peak euphoria gave way through March into April. By the **CEO Investor Day on 10 April 2026**, the stock had retraced to **₩149,300** [17], reflecting that the longer-dated FY26 plan was now fully priced and macro/tariff sentiment had begun to fade.

Then **Q1 2026 missed**:

- Q1 Operating profit came in at **₩2.205T vs StreetAccount ₩2.330T** [16].
- Management's narrative of "normalization from Q1 2026" set up at the FY25 print [9] had not yet showed up cleanly in the actual quarter.

The macro overlay added uncertainty: on 28 April 2026, reporting surfaced that foreign automakers including Kia were **"considering withdrawing cheapest models from US market if USMCA is not renewed or weakened"** [19] — a tail risk that reset how investors priced the entry-level/value-trim end of Kia's US mix.

## May 2026 — Governance Volatility

On **11 May 2026, co-CEO/president Choi Jun-young resigned effective immediately**, with the stock at **₩174,700** [18]. A senior governance change at a company actively trying to convince investors that its FY26 normalization plan is intact added a fresh, non-operational uncertainty layer heading into Q2.

## Where Valuation and Sentiment Sit at Period-End

Tracing the year by price points alone tells the sentiment arc clearly:

| Date | Share price (KRW) | Catalyst | Source |
|---|---|---|---|
| 16 May 2025 | 92,000 | CLSA O-PF, TP ₩105,000 (coverage transfer) | [1] |
| 28 Jan 2026 | 151,850 | Q4 miss + FY26 guide + DPS hike | [12][13][21] |
| 25 Feb 2026 | 197,300 | Georgia 5M HEV milestone (intraday +₩23,300) | [15] |
| 10 Apr 2026 | 149,300 | CEO Investor Day (re-rated lower) | [17] |
| 24 Apr 2026 | 154,100 | Q1 2026 OP miss | [16] |
| 11 May 2026 | 174,700 | Co-CEO resignation | [18] |

Over the twelve months the equity nearly doubled in price from the May-2025 trough to the February-2026 peak before settling materially below that peak — a pattern consistent with the textbook arc of a tariff-shock cycle: pre-shock complacency → quantified earnings drag → trough confirmation → guidance reset → relief/euphoria on mitigation evidence → digestion on execution risk.

## The Investor Narrative — Three Forces That Shaped the Year

1. **Business performance**: Q3 2025 was the explicit profit trough (US tariff −₩2.02T YTD impact [7]); Q4 2025 confirmed sequential recovery [9]; Q1 2026 missed the Street despite the recovery framing [16] — leaving open the question of whether the trough is truly past or whether tariff/incentive pressure is structurally elevated.

2. **Market conditions**: A 25% US import tariff in mid-2025 stepping down to a baked-in 15% by FY26 [8] was the single biggest macro variable; IRA expiry in late September 2025 distorted EV demand timing in the US [6]; Europe's electrification chasm forced incentive pressure; USMCA renegotiation [19] remains an unresolved tail.

3. **Company actions**: Aggressive product cycle (Telluride full model change, Telluride HEV, Carnival HEV, EV2/EV3/EV4/EV5 completion in Europe [10]); local-production scale-up in Georgia signalled as the tariff offset [15]; capital-return continuity (35% TSR, DPS ₩6,500 → ₩6,800 [11][21]); offset by governance noise (CEO change [18]) at the end of the period.

The valuation re-rating from ~₩92k to mid-₩170k–high-₩190k captured the market's shift from pricing-in a tariff drag to pricing-in mitigation. The May-2026 setup — Q1 miss, CEO resignation, USMCA tail, but TSR commitment intact and Telluride/HEV cycle hitting full stride — leaves Kia in a "show me" phase where Q2 print and execution evidence will determine whether the multi-month re-rating sustains or unwinds.

---
**Sources**
[1] Korea autos (Transfer of coverage) — CLSA (16 May 2025) — 607959723LinqAlpha.PDF (rating/TP table)
[2] Korea autos (Transfer of coverage) — CLSA (16 May 2025) — 607959723LinqAlpha.PDF (coverage handover note)
[3] Kia Corporation Q2 2025 Earnings Call — tariff impact onset May/June 2025
[4] Kia Corporation Q2 2025 Earnings Call — US retail +7-8%, hybrid ramp, IRA expiry
[5] Kia Corp Q3 2025 Earnings Call (31 Oct 2025) — US sales +11.1%, market share 5.3%
[6] Kia Corp Q3 2025 Earnings Call (31 Oct 2025) — electrified vehicles +32.3% YoY
[7] Kia Corporation Q3 2025 IR presentation — US Tariff Impact −₩2,020bn YTD
[8] Kia Corporation Q4 2025 Earnings Call — FY26 revenue target ₩122.3T, OP ₩10.2T, 8.3% margin, 15% US tariff assumption
[9] Kia Corporation Q4 2025 Earnings Call — trough in Q3 2025, recovery in Q4 2025
[10] Kia Corporation Q4 2025 Earnings Call — Telluride full model change (first in 7 years), Carnival HEV
[11] Kia Corporation Q4 2025 Earnings Call — TSR 35% reaffirmed, DPS ₩6,500 → ₩6,800
[12] StreetAccount — Kia Q4 2025 OP ₩1.843T vs SA ₩1.873T (28 Jan 2026)
[13] StreetAccount — Kia FY26 guidance ₩122.3T vs FactSet ₩120.609T (28 Jan 2026)
[14] StreetAccount — Yuanta upgrades Kia to Buy (28 Jan 2026, ₩149,700)
[15] StreetAccount — Kia +₩23,300 to ₩197,300 on 5M HEV Georgia milestone (25 Feb 2026)
[16] StreetAccount — Kia Q1 2026 OP ₩2.205T vs SA ₩2.330T (24 Apr 2026)
[17] StreetAccount — Kia CEO Investor Day takeaways (10 Apr 2026)
[18] StreetAccount — Kia co-CEO Choi Jun-young resigns, ₩174,700 (11 May 2026)
[19] StreetAccount/Reuters — USMCA withdrawal warning from foreign automakers (28 Apr 2026)
[20] StreetAccount — Korea-Canada MOU on Korean auto manufacturing (28 Jan 2026)
[21] StreetAccount — Kia year-end DPS ₩6,800 vs ₩6,500 prior (28 Jan 2026)

## Citations

- [3] **Kia Corporation, Q2 2025** · external
- [4] **Kia Corporation, Q2 2025** · external
- [5] **Kia Corp., Q3 2025 Earnings Call, 31-October-2025 1** · external
- [6] **Kia Corp., Q3 2025 Earnings Call, 31-October-2025 1** · external
- [7] **Kia Corporation, Q3 2025** · external
- [8] **Kia Corporation, Q4 2025** · external
- [9] **Kia Corporation, Q4 2025** · external
- [10] **Kia Corporation, Q4 2025** · external
- [11] **Kia Corporation, Q4 2025** · external
- [12] **Kia Corp. reports Q4 operating profit KRW1.843T vs StreetAccount KRW1.873T** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4531236&_doc_date=2026-01-28&_doc_product=SA>
- [13] **Kia Corp. guides FY revenue KRW122.3T vs FactSet KRW120.609T** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4531241&_doc_date=2026-01-28&_doc_product=SA>
- [14] **Kia Corp. upgraded to buy from hold at Yuanta Securities Korea** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4532775&_doc_date=2026-01-28&_doc_product=SA>
- [15] **Kia Corp. trading higher following 5M hybrid electric vehicle production milestone at Georgia plant** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4572450&_doc_date=2026-02-25&_doc_product=SA>
- [16] **Kia Corp. reports Q1 Operating profit KRW2.205T vs StreetAccount KRW2.330T** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4639173&_doc_date=2026-04-24&_doc_product=SA>
- [17] **Street Takeaways - Kia Corp. CEO Investor Day** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4624318&_doc_date=2026-04-10&_doc_product=SA>
- [18] **Kia Corp. co-CEO/president Choi Jun-young resigns, effective immediately** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4671689&_doc_date=2026-05-11&_doc_product=SA>
- [19] **Foreign automakers warn they are considering withdrawing cheapest models from US market if USMCA is not renewed or weakened - media report** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4642855&_doc_date=2026-04-28&_doc_product=SA>
- [20] **South Korea and Canada enter MOU to bring Korean auto manufacturing to Canada - Globe and Mail** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4532334&_doc_date=2026-01-28&_doc_product=SA>
- [21] **Kia Corp. declares year-end dividend KRW6,800/share; StreetAccount notes year-ago figure KRW6,500/share** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4531242&_doc_date=2026-01-28&_doc_product=SA>

