PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩6,800 per share · Prices as of the 2026-10-02 close
Kia posted record quarterly revenue and record unit sales in the second quarter of 2026, yet operating profit still fell year on year, leaving the company in a phase of step-by-step margin repair under tariff and incentive pressure.
Second-quarter 2026 revenue of 33.0371 trillion won was a quarterly record, while operating profit of 2.6286 trillion won came in below the 2.7648 trillion won of a year earlier.
The operating margin has risen for three consecutive quarters from a trough of 5.1% in the third quarter of 2025 to 6.6%, 7.5% and 8.0%.
Company targets for 2026 are 3.35 million units, revenue of 122.3 trillion won, operating profit of 10.2 trillion won and an 8.3% margin; the first-half margin ran below that level.
Electrified retail sales rose 60% year on year in the second quarter of 2026 to a 35.3% mix, led by hybrids in the United States and battery EVs in Europe and Korea.
The United States cut its tariff on Korean cars and parts to 15% while keeping 25% on pickup trucks; incentive competition and currency-driven warranty provisions remain margin swing factors.
Kia is the volume automaker within Hyundai Motor Group, producing and selling passenger cars, RVs such as SUVs and minivans, commercial vehicles and purpose-built vehicles from plants in Korea and overseas. Wholesale sales for 2025 came to 3,135,803 units.
The sales mix is dominated by overseas markets: in the second quarter of 2026, Korea accounted for 18.2% of wholesale volume and overseas markets for 81.8%.
SUVs are the backbone of the lineup, and in August 2026 the best-selling model globally was the Sportage at 46,239 units, followed by the Seltos at 35,698 and the Sorento at 18,404.
In the United States the North America-only flagship Telluride and hybrid SUVs support both volume and pricing, while in Western Europe an affordable EV lineup plays that role. Electrified retail sales reached 296,000 units in the second quarter of 2026, up 60% year on year, lifting the electrified mix to 35.3%.
In commercial vehicles and PBVs, the first PBV model PV5 has begun selling in Korea and Europe, and the dedicated PBV plant in Hwaseong is ramping up alongside a broader hybrid lineup.
Competitively, Kia faces hybrid rivalry with Japanese and American automakers in the United States and simultaneous price competition with Chinese and imported EV brands in Europe and Korea.
On governance, a circular shareholding loop running from Hyundai Motor to Kia to Hyundai Mobis and back remains in place, with Kia holding an 18.15% stake in Hyundai Mobis.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩29.3T | ₩2.8T | 9.4% |
| 2025Q3 | ₩28.7T | ₩1.5T | 5.1% |
| 2025Q4 | ₩28.1T | ₩1.8T | 6.6% |
| 2026Q1 | ₩29.5T | ₩2.2T | 7.5% |
| 2026Q2 | ₩33T | ₩2.6T | 8.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩86.6T | ₩7.2T | ₩5.4T | 8.4% | 13.8% | 87.4% |
| 2023 | ₩99.8T | ₩11.6T | ₩8.8T | 11.6% | 18.9% | 73.2% |
| 2024 | ₩107.4T | ₩12.7T | ₩9.8T | 11.8% | 17.5% | 66.1% |
| 2025 | ₩114.1T | ₩9.1T | ₩7.6T | 8.0% | 12.4% | 61.8% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
On an annual basis, revenue grew for four straight years from 86.559 trillion won in 2022 to 99.8084 trillion in 2023, 107.4488 trillion in 2024 and 114.1409 trillion in 2025.
Operating profit, by contrast, slipped from 11.6079 trillion won in 2023 and 12.6671 trillion in 2024 to 9.0781 trillion in 2025, with the margin easing from 11.6% to 11.8% and then 8.0%. Net profit attributable to owners likewise fell from 9.773 trillion won in 2024 to 7.561 trillion in 2025.
Management has attributed the profit decline amid rising revenue to United States tariffs, higher incentives in North America and Europe, and currency-driven warranty provisions.
The quarterly pattern shows a clearer recovery: after bottoming at operating profit of 1.4623 trillion won on revenue of 28.686 trillion in the third quarter of 2025, profit rose for three straight quarters to 1.8425 trillion won on 28.0877 trillion in the fourth quarter of 2025, 2.2051 trillion on 29.5019 trillion in the first quarter of 2026 and 2.6286 trillion on 33.0371 trillion in the second quarter of 2026, while the operating margin also climbed for three consecutive quarters from its 5.1% trough.
Even so, second-quarter 2026 operating profit remains below the 2.7648 trillion won of the same quarter in 2025, and the company cited aggressive incentive spending in Korea and Western Europe plus higher warranty provisions from a weaker won as the drag.
The balance sheet shows the debt-to-equity ratio falling from 87.4% in 2022 to 61.8% in 2025, with total equity of 61.1905 trillion won against total liabilities of 37.7886 trillion won. Operating cash flow eased from 12.5644 trillion won in 2024 to 9.0541 trillion in 2025, still broadly in line with reported earnings.
End demand is diverging by region. Global industry demand fell 3.8% in the second quarter of 2026 on Middle East instability and weak Chinese consumer sentiment. Against that backdrop, Kia set a quarterly volume record and lifted its global market share to 4% from 3.7% a year earlier.
Powertrain demand also varies sharply by market. In the United States, rising gasoline prices helped hybrid sales jump 99% in August, while the EV6 fell 60.4% and the EV9 declined 33.2%.
In contrast, Western European volume rose 12.9% in the second quarter of 2026 on the EV2, EV4, EV5 and PV5 launches, outpacing the regional market's 4.8% growth.
The trade backdrop is less punitive than in 2025: the United States cut its tariff on Korean vehicles and parts to 15% retroactive to November 1, 2025, while applying 25% to pickup trucks.
The Korea Automobile and Mobility Association projects 1.69 million domestic sales and 2.75 million export units for 2026, citing strong eco-friendly vehicle demand and the tariff reduction.
On competition, pricing and incentive programs aimed at Chinese EV brands in Korea and Western Europe continue to shape both volume and margins at the same time.
The company has already published its 2026 targets: wholesale volume of 3.35 million units and a 3.8% share, revenue of 122.3 trillion won, operating profit of 10.2 trillion won and an 8.3% operating margin. Eco-friendly vehicle targets are 1,122,000 units, comprising 691,000 hybrids and 400,000 battery EVs.
At the second-quarter briefing, management said it expects solid second-half results and to meet its full-year guidance.
Specific levers include expanded annual capacity for the Telluride including its hybrid variant, and second-half customer deliveries of the Sportage Hybrid built at HMGMA, plus wider sales of the EV3, EV5 and PV5 in Korea and a record annual EV volume target.
Progress still trails the target, however: the first-half operating margin of 7.7% sat below the 8.3% annual goal, implying roughly 9% profitability is needed in the second half to hit the remaining plan.
Volume trends are moderately positive, with cumulative sales of 2,196,123 units from January to August 2026, up 4.4% year on year. Longer term, the company has laid out a 2030 goal of 4.13 million units and a 4.5% share, alongside expansion of the EV lineup from 11 to 14 models.
On the basis of the last four reported quarters of earnings, Kia's earnings multiple sits below the average for large Korean manufacturers, and the share price trades below book value per share.
The dividend yield runs above the KOSPI average, supported by a 35% total shareholder return goal for 2025 through 2027, a dividend floor, and regularized buybacks and cancellations of up to 10% of earnings. The company has also set a total shareholder return target of at least 35% for 2026 through 2028.
On the earnings side, profit declined in 2025 versus 2024 before quarterly profit began recovering from the third-quarter 2025 trough, which shifts the denominator of any multiple calculation, so the perceived multiple depends heavily on which earnings period is used.
For reference, analyst Kim Jin-seok at Mirae Asset Securities wrote in an April 2026 report that tariff and incentive effects persist but mix is starting to contribute to profit growth, and set a target price of 200,000 won. That view belongs to the brokerage; this report offers no valuation judgment of its own.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
Electrified retail sales rose 60% to 296,000 units in the second quarter of 2026, taking the electrified mix to 35.3%. Battery EV sales climbed 88.4% to 110,000 units, driven by the EV2, EV4 and EV5 launches plus the first PBV, the PV5.
Management said better average selling prices in developed markets translated directly into revenue growth. That combination supported the top line even as industry demand contracted.
The United States lowered its tariff on Korean vehicles and parts to 15%, retroactive to November 1, 2025. Tariffs weighed heavily on profit in 2025, but a settled rate improves the predictability of cost planning.
On top of that, expanded Telluride capacity and second-half deliveries of the HMGMA-built Sportage Hybrid increase the share of locally supplied volume in the United States. A flexible production strategy also uses the Korean, Chinese, Indian and Mexican plants as supply hubs for emerging markets.
Dividends plus share cancellations based on 2025 results exceeded 3.3 trillion won, so the amount returned to shareholders rose year on year even as operating profit fell sharply. The company has run a policy of buying back about 500 billion won of its own shares each year and cancelling 250 billion won of that.
Consolidated retained earnings stood at 54.5196 trillion won. The fall in the debt-to-equity ratio from 87.4% in 2022 to 61.8% in 2025 also underpins the capacity for returns.
Second-quarter 2026 revenue of 33.0371 trillion won was a record, yet operating profit of 2.6286 trillion won fell short of the 2.7648 trillion won posted in the second quarter of 2025. Management pointed to aggressive incentive spending in Korea and Western Europe and higher warranty provisions from a weaker won.
The second-quarter margin was 1.4 percentage points lower year on year, and the 7.7% first-half margin trailed the 8.3% annual target. Commentary has flagged that renewed promotional spending to push volume, or persistent tariff costs, could delay reaching the targeted profitability.
In August 2026 hybrid sales in the United States rose 99%, but the EV6 fell 60.4% and the EV9 dropped 33.2%.
The simultaneous decline of the two main EV models makes the record volume harder to read positively, and the speed of improving EV pricing and product appeal has been flagged as the swing factor for coming results.
With a 2026 target of 400,000 battery EVs, softer United States EV demand complicates the regional mix needed to reach it. August total United States volume grew only 0.9%, underlining uneven regional momentum.
Domestic sales in August 2026 came to 40,213 units, down 7.6% year on year. The company attributed this to fewer working days during the summer holiday period, but the backdrop is a domestic market projected to stay below 1.7 million units in 2026.
With overseas markets making up more than 80% of volume, currency, tariff and geopolitical factors translate directly into earnings, and global industry demand fell 3.8% in the second quarter of 2026 on Middle East instability and weak Chinese sentiment.
The United States tariff on Korean vehicles and parts has been set at 15%, while pickup trucks still face 25%. Tariffs can be changed by administrative action, and any shift in rate or scope would hit both costs and United States pricing strategy.
Combined United States tariff costs for Hyundai Motor and Kia are estimated in the trillions of won annually, with one estimate putting the 2025 figure at around 7.2 trillion won. Changes to EV subsidy policy in Europe and Korea are another regulatory variable tied directly to electrified sales plans.
The average won-dollar rate in the second quarter of 2026 was 1,502 won, 7.0% higher year on year. A weaker won helps reported revenue but also inflated won-denominated warranty provisions, trimming operating profit.
Management had similarly cited a spike in period-end exchange rates and the resulting warranty provision increase as a drag on first-quarter profitability. Currency therefore feeds into revenue and costs with different lags each quarter, and any quality issue could amplify the provision burden.
Hyundai Motor Group has yet to unwind the circular shareholding loop running from Hyundai Motor to Kia to Hyundai Mobis and back.
At its 2026 annual meeting Kia approved holding and disposing of treasury shares for employee compensation, which ties into the exemption clause in the amended Commercial Act that otherwise requires cancellation.
Some 53,000 shares worth about 9.1 billion won were granted to 164 executives including the chief executive, drawing objections from the labor union. Whether treasury shares are cancelled or used for compensation continues to affect the share count and how shareholder returns are perceived.
September and third-quarter cumulative sales releases. The key checks are whether the trend of 2,196,123 units for January to August, up 4.4% year on year holds, and whether domestic declines continue to be offset by overseas growth.
Third-quarter 2026 results. The focus is whether the operating margin extends its climb for a fourth quarter from the 5.1% trough of the third quarter of 2025, and how close it gets to the roughly 9% second-half profitability implied by the annual plan.
Actual progress on customer deliveries of the HMGMA-built Sportage Hybrid and expanded Telluride capacity. A higher share of United States local production directly affects tariff exposure and the pricing mix.
Full-year 2026 volume tallies and whether the 3.35 million unit wholesale target is met. Because 2025 volume came in below guidance, the gap versus target is a specific item to watch.
Confirmed fourth-quarter and full-year 2026 results plus dividend and treasury share decisions. This is when the first-year execution of the 35%-plus total shareholder return target for 2026 through 2028 and the annual scale of buybacks and cancellations become concrete.
Kia's recent results can be summed up as record top line with profit still recovering. Revenue grew from 86.559 trillion won in 2022 to 114.1409 trillion in 2025, and the second quarter of 2026 set a quarterly record at 33.0371 trillion won.
Operating profit, however, fell from 12.6671 trillion won in 2024 to 9.0781 trillion in 2025, and the 2.6286 trillion won posted in the second quarter of 2026 still trails the 2.7648 trillion won of a year earlier.
That said, the quarterly operating margin has risen for three consecutive quarters from its 5.1% trough in the third quarter of 2025, and the United States tariff rate settling at 15% has reduced uncertainty in cost assumptions.
The constructive case rests on a widening electrified mix and better average selling prices, expanding local production, and shareholder returns maintained through the profit downturn.
The cautious case rests on the gap between the 7.7% first-half margin and the 8.3% annual target, incentive competition in Korea and Europe, declining sales of key EV models in the United States, and provision volatility linked to exchange rates.
What needs verifying from the third quarter onward is whether margins return to the planned trajectory and whether electrified volume growth converts into cost and pricing gains; this report is intended to organize those facts and contains no buy or sell opinion and no target price.
Report written 2026-09-17 · Data as of 2026-09-16
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