KOSPIAutomotive073240

Kumho Tire

₩6,880 0.00%2026-10-02 close

Market Cap

₩2T

Turnover

₩3.4B

Volume

490,000 shares

Shares out.

290M

PER

4.3×

PBR

0.9×

EPS

₩1,659

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

High-Inch Mix and Europe Pull, Costs and Capex Push Back

Even while rebuilding fire-damaged capacity, a mix shift toward high-inch and EV tires plus European and North American demand has sustained sales and a double-digit operating margin, while raw material and logistics costs and simultaneous Hampyeong and Poland capex sit on the other side of the ledger.

1
In Q2 2026 revenue was KRW 1,332.8bn and operating profit KRW 182.2bn, both above the prior quarter, with an operating margin of 13.7%.
2
Company guidance for 2026 is KRW 5.1trn in revenue, a 47% share for 18-inch-and-above tires and a 30% EV tire supply share; as of Q2 the high-inch share had reached 47% while the EV share was 25.1%.
3
Rather than rebuilding the fire-hit Gwangju plant, the company chose to relocate to Hampyeong in Jeonnam, spending KRW 660.9bn in phase one for 5.3m units of annual capacity to be completed by end-2027.
4
In Opole, Poland, about KRW 860bn is being invested in the company's first European plant with 6m units of annual capacity, targeting first output in August 2028.
5
In the EU's preliminary anti-dumping determination on Chinese passenger and light truck tires, the rate applied to the company was 29.9%, leaving adjustment of Chinese sourcing as a near-term task.

Business structure

Kumho Tire is a full-line tire maker supplying passenger car and light truck (PCLT) and truck and bus (TBR) tires through both original equipment (OE) and replacement (RE) channels.

It runs domestic plants in Gwangju, Gokseong and Pyeongtaek and overseas plants in China, Vietnam and Georgia in the United States; Samsung Securities noted in a June 2026 report that roughly 30% of total capacity sits in China and about half of Europe-bound volume is currently served from Chinese plants.

By region, first-half 2026 revenue was KRW 830.7bn in North America (up 3.2% year on year), KRW 758.2bn in Europe (up 12.2%) and KRW 183.5bn in China (up 7.4%), so North America and Europe combined accounted for more than 60% of first-half sales.

The product axis is higher-margin 18-inch-and-above tires plus dedicated EV tires; in Q2 2026 the high-inch share was 47% and the EV tire share of global OE revenue was 25.1%.

OE customers are centered on European automakers: the company said OE supply in Europe expanded led by the Volkswagen Group, with channel diversification and premium new products supporting results.

In the domestic replacement market it operates its own retail brand Tire Pro, and from August 3, 2026 it began selling Continental products at Tire Pro stores nationwide under a memorandum of understanding, as part of a multi-brand strategy.

The competitive field is a domestic three-way structure: Q2 2026 high-inch sales shares were 49.1% at Hankook Tire & Technology, 47.0% at Kumho Tire and 38.8% at Nexen Tire. On US tariffs, ownership of the Georgia plant lets the company avoid part of the burden, a noted difference versus Nexen Tire.

That said, the main domestic base is still being restructured after the fire, so the pace of capacity recovery and the completion schedule for new sites remain the key structural variables.

Earnings trend

Quarterly revenue · Operating profit

₩1.2T₩175.2B25Q2₩1.1T₩108.5B25Q3₩1.2T₩145.6B25Q4₩1.2T₩147B26Q1₩1.3T₩182.2B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩3.6T₩23.1B2022₩4T₩411B2023₩4.5T₩588.6B2024₩4.7T₩575.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.2T	₩175.2B	14.3%
2025Q3	₩1.1T	₩108.5B	9.7%
2025Q4	₩1.2T	₩145.6B	12.6%
2026Q1	₩1.2T	₩147B	12.6%
2026Q2	₩1.3T	₩182.2B	13.7%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩3.6T	₩23.1B	-₩79B	0.7%	−7.0%	277.2%
2023	₩4T	₩411B	₩157.8B	10.2%	12.5%	245.3%
2024	₩4.5T	₩588.6B	₩324.9B	13.0%	18.9%	181.5%
2025	₩4.7T	₩575.9B	₩347.4B	12.2%	17.1%	147.4%

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

Earnings analysis

The multi-year path shows a clear profit recovery.

From KRW 3,559.2bn in revenue with only KRW 23.1bn of operating profit (0.7% margin) and a KRW 79.0bn controlling-interest net loss in 2022, results improved to KRW 4,041.4bn in revenue and KRW 411.0bn in operating profit (10.2%) in 2023, then KRW 4,532.2bn and KRW 588.6bn (13.0%) in 2024, swinging from loss to profit.

In 2025 revenue rose again to KRW 4,701.3bn with operating profit of KRW 575.9bn (12.2%) and controlling-interest net profit of KRW 347.4bn.

Over the same span operating cash flow improved sharply from negative KRW 180.0bn in 2022 to KRW 915.3bn in 2025, while the debt-to-equity ratio fell from 277.2% in 2022 to 245.3% in 2023, 181.5% in 2024 and 147.4% in 2025.

Quarterly, the margin was compressed in Q3 2025 at KRW 1,113.7bn in revenue and KRW 108.5bn in operating profit (9.7%), then recovered and widened through Q4 2025 (KRW 1,160.1bn and KRW 145.6bn, 12.6%), Q1 2026 (KRW 1,167.8bn and KRW 147.0bn, 12.6%) and Q2 2026 (KRW 1,332.8bn and KRW 182.2bn, 13.7%).

For Q2 2026, revenue rose 9.1% and operating profit 4% year on year, and operating profit was described as beating the market consensus by about 26%. A key driver cited was a record quarterly European revenue of KRW 420.9bn.

What deserves attention is the line below operating profit: in Q2 2025 operating profit reached KRW 175.2bn yet controlling-interest net profit was around negative KRW 1.0bn, essentially break-even, before normalizing to KRW 82.8bn in Q3 2025, KRW 169.1bn in Q4 2025, KRW 95.0bn in Q1 2026 and KRW 129.7bn in Q2 2026, suggesting fire-related costs and financial and currency items amplified quarterly swings below the operating line.

Summing the four most recent quarters (Q3 2025 through Q2 2026) gives roughly KRW 4,774.4bn in revenue, about KRW 583.3bn in operating profit (an operating margin near 12.2%) and about KRW 476.6bn in controlling-interest net profit.

Industry analysis

Tire sector profitability is currently driven less by volume than by product mix and the price-cost spread. Demand for high-inch tires is structurally rising with the spread of SUVs and EVs, and the industry estimates their operating margin at three to four times that of standard tires.

In Q2 2026 the three Korean makers all grew revenue but diverged on profitability, with Hankook Tire & Technology holding an operating margin in the 15% range while Nexen Tire's net profit plunged 98.9% year on year.

On costs, butadiene accounts for 75% of the cost of styrene-butadiene rubber and synthetic rubber makes up 20-25% of a passenger car tire, while carbon black and natural rubber prices have also risen 20-30%.

Natural rubber remains firm: Chinese spot natural rubber passed CNY 17,900 per tonne in early September, about 14% above the start of the year, and the Association of Natural Rubber Producing Countries projects 15.32m tonnes of output against 15.60m tonnes of consumption this year, a shortfall of roughly 280,000 tonnes.

On regulation, the European Union has moved to impose duties of up to 52% on Chinese-made tires, and Samsung Securities noted in a June 2026 report that the preliminary rate applied to Kumho Tire was 29.9%.

On where the cost cycle stands, the same report said raw materials were 30.7% of first-quarter revenue with logistics near 10%, and that with a three-to-six month inventory lag the raw material burden should peak in the third quarter before easing.

Pricing action is already under way: it stated that price increases of 3-5% were implemented in Asia and Korea in the second quarter, with similar increases planned for Europe and the United States in the third quarter.

The company's sector position is therefore that of a close follower on high-inch mix, shielded partly by US local production but exposed through reliance on Chinese output for Europe.

Outlook

The company's officially stated 2026 targets are KRW 5.1trn in revenue, a 47% share of sales from 18-inch-and-above tires and a 30% EV tire supply share.

First-half progress reached KRW 2,500.6bn in revenue, or 49% of the annual target; the high-inch share has already met the goal, while the EV share at 25.1% still has ground to cover.

On production, the Gwangju plant restarted at 4,000 units per day in November 2025 and stepped up to 6,000 units per day in January 2026, with the company aiming for a 10,000-unit daily system to secure roughly 3.5m units of annual capacity. The medium-term axis is two new plants.

Hampyeong began warehouse construction in January 2026 and mixing and calendering buildings in April, with production-building work starting in the second half, phase one completion by end-2027 and full operation from the first half of 2028, and phase one involves KRW 660.9bn for 5.3m units of annual capacity, with expansion potentially lifting capacity toward 12m units a year.

In Europe, about KRW 860bn is being invested in Opole, Poland for a 6m-unit facility targeting first operation in August 2028, and Samsung Securities forecast in a June 2026 report that once European local production starts, tariff relief, lower logistics costs and better responsiveness to local OE customers should come together.

On capital policy, the same report noted that the consolidated balance sheet moved to a retained-surplus structure at end-2025 and the parent-basis accumulated deficit had narrowed to KRW 45.5bn by the end of Q1 2026, with the clearing of that deficit raising the possibility of resuming a dividend suspended since 2007.

Still, since the company intends to push ahead with the Hampyeong and European plants to build a Korea-Europe-North America production network, capital spending and shareholder-return capacity compete for the same funds, which is something to verify.

Valuation

PER

4.3×

PBR

0.9×

ROE

23.1%

EPS

₩1,659

BPS

₩8,433

Dividend per share

₩0

The earnings base has moved from near-break-even operating profit and a net loss in 2022 to profit from 2023 onward, holding a double-digit operating margin through the four most recent quarters, while equity grew and the debt-to-equity ratio fell sharply.

The multiples embedded in the share price, by contrast, have traded below the domestic auto parts and tire sector average, and note that on the company's own book value basis the stock computes at a discount to net assets whereas on Korea Exchange disclosed figures it computes at a slight premium, so the direction depends on the calculation basis.

There is no confirmed disclosed dividend per share; Samsung Securities cited the possibility of a dividend restart as the accumulated deficit shrinks in a June 2026 report, and Hana Securities also flagged a low valuation and potential dividend resumption as investment points in a July 2026 report.

On target prices, Hana Securities initiated at KRW 8,300 in a report dated July 31, 2026, and Sangsangin Securities raised its target from KRW 6,500 to KRW 7,500 in a report dated July 20, 2026.

Samsung Securities, in its June 2026 report, said a revaluation of the Gwangju plant's asset value could be a re-rating factor while declining to issue a rating or target price.

More than the absolute level of the multiples, the real axis of the valuation debate is whether post-fire capacity recovery holds and whether Hampyeong and Poland capex can be absorbed within cash flow.

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

Bull factors

Product Mix Has Defended the Margin

The 13.7% operating margin in Q2 2026 was achieved while domestic output was still impaired by the fire.

The company said expanded sales in North America and Europe plus higher sales of high-margin products such as high-inch and EV tires drove the improvement, with the high-inch share at 47% and the EV supply share at 25.1%.

Since the industry estimates high-inch operating margins at three to four times those of standard tires, the mix can absorb part of any cost shock while it holds. The quarterly margin path from 9.7% in Q3 2025 to 13.7% in Q2 2026 supports the same logic.

Financial Leverage Has Fallen Quickly

The debt-to-equity ratio declined for three straight years, from 277.2% in 2022 to 245.3% in 2023, 181.5% in 2024 and 147.4% in 2025. Over the same period operating cash flow swung from negative KRW 180.0bn in 2022 to KRW 915.3bn in 2025, and equity rose from KRW 1,244.6bn in 2022 to KRW 2,238.7bn in 2025.

Samsung Securities noted in a June 2026 report that the consolidated balance sheet turned to a retained-surplus structure at end-2025 and the parent-basis deficit had narrowed to KRW 45.5bn by the end of Q1 2026. The room to fund large investments from internal cash is wider than it was a few years ago.

Two Options: European Production and Land Value

The Opole plant in Poland involves about KRW 860bn for 6m units of annual capacity, targeting first operation in August 2028, and Samsung Securities forecast in a June 2026 report that local production would ease tariff and logistics costs and improve responsiveness to OE customers.

On the Gwangju site, the government's final selection of the Gwangju military airport as the location for a Honam semiconductor industrial complex has drawn attention to the adjacent plant site as supporting land.

Given that a Mirae Asset Securities consortium, the preferred bidder in the 2019 sale process, had set a price of KRW 1.4trn before the sale collapsed at the end of 2022 amid a construction downturn, whether the process restarts is itself a checkpoint.

Bear factors

Costs and Logistics Are Still Near Peak

Samsung Securities said in a June 2026 report that raw materials were 30.7% of first-quarter revenue with logistics near 10%, and that the raw material burden should peak in the third quarter before easing, and Hana Securities forecast in a July 2026 report that the third quarter would be the period of heaviest cost pressure.

Indeed, Chinese spot natural rubber prices exceeded CNY 17,900 per tonne in early September, some 14% above the start of the year. How far price increases offset cost inflation will first be visible in third-quarter results, and the lag between pricing and cost pass-through can itself add margin volatility.

Dual Exposure to Tariffs and Trade Measures

The European Union's move to impose duties of up to 52% on Chinese-made tires puts the three Korean makers in scope, since part of their Europe-bound volume has been produced in China.

Samsung Securities said in a June 2026 report that the preliminary rate for Kumho Tire is 29.9%, that about 30% of total capacity sits in China and roughly half of Europe-bound volume is served from China, making a near-term tariff burden unavoidable.

The company said it plans to respond by shifting sourcing to Korea and Vietnam to reduce Chinese dependence, but such reallocation can create logistics and utilization inefficiencies. US tariff policy is also a cost factor the company itself has cited.

Simultaneous Large Capex With a Delayed Land Sale

Total investment plans including Hampyeong and Poland have been put at KRW 1.5trn, with Hampyeong phase one alone at KRW 660.9bn. Yet phase two at Hampyeong can only proceed after the Gwangju site is sold, and the company judges asset disposal necessary to fund further large investment.

It said the sale timing is not fixed and that after bidding and preferred-bidder selection, consultation with public institutions must follow, while rezoning of the site remains under discussion with the Gwangju city government with nothing finalized. Delay in the sale or rezoning could push back both the phase-two schedule and the financial burden.

Risk factors

Production Disruption and Asset Risk

The May 2025 Gwangju fire halted the main domestic lines for an extended period; analysis noted that daily output of 30,000 units stopped entirely, wiping out 15% of total capacity, while fixed costs of about KRW 12bn a month continued to accrue.

Recovery has progressed, but a 10,000-unit daily system and roughly 3.5m units of annual capacity still differ from pre-fire levels. Sangsangin Securities said in a July 2026 report that annualized capacity including outsourced volume was recovering, yet outsourcing leaves cost and quality-control variables.

End Demand and the EV Cycle

The company targets a 30% EV tire supply share, but the Q2 2026 figure was 25.1% after 20.6% in the first quarter. If EV sales momentum wavers, both the pace toward that target and the degree of mix improvement are affected.

Chinese demand is another drag, with analysis noting that weak Chinese auto sales continue to weigh on tire demand and rubber consumption. OE supply is tied to automaker production plans, an area largely outside the company's control.

Community, Permitting and Labor Variables

The relocation depends heavily on local permitting and stakeholder agreement. It was noted that a fire damage response committee took a firm stance demanding disclosure of the demolition process and long-term health measures, and that the longer resident compensation talks run, the slower plant normalization becomes.

On employment, management and the union agreed to guarantee jobs until the Hampyeong move is complete, with some Gwangju production staff reassigned to Pyeongtaek and Gokseong; redeployment and rotating shifts can affect productivity.

Although the Gwangju city government agreed to apply a fast-track process to shorten administrative steps, final confirmation of rezoning remains to be verified.

What to watch next

Late October 2026
Q3 2026 results. Several brokerages flagged the third quarter as the cost peak, so the key items are how far the operating margin adjusts from 13.7% in Q2 and how much of the price increases are reflected.
Q4 2026
Whether European and US price increases are fully reflected, and progress on the EV tire supply share versus the 30% target. Narrowing the gap from 25.1% in Q2 would indicate the mix improvement is durable.
Q4 2026 to H1 2027
Whether rezoning of the Gwangju site is finalized and a sale process (bidding and preferred-bidder selection) begins. The company has said sale proceeds are linked to funding Hampyeong phase two.
Early 2027 (FY2026 results and annual general meeting)
Whether the KRW 5.1trn revenue guidance was met, and the company's actual decision on dividend policy after clearing its accumulated deficit. The dividend has been suspended since 2007, so resumption is the item to verify.
End-2027
Whether phase one of the Hampyeong plant (5.3m units a year) is completed. The company plans full operation in the first half of 2028, so construction delays or cost overruns would directly affect the domestic capacity recovery timeline.

Overall view

Kumho Tire's recent results do not read like those of a company that suffered a major fire.

From a 0.7% operating margin and a controlling-interest net loss in 2022, it swung to profit from 2023, with KRW 4,701.3bn in revenue and KRW 575.9bn in operating profit in 2025 and KRW 1,332.8bn in revenue and KRW 182.2bn in operating profit (13.7%) in Q2 2026, while the debt-to-equity ratio fell from 277.2% in 2022 to 147.4% in 2025.

The drivers were a mix shift toward high-inch and EV tires plus expanded sales in Europe and North America, with European revenue setting a record quarterly high in Q2.

On the other side sit cost variables: rising natural rubber and butadiene prices, higher logistics costs, the European Union's anti-dumping measures on Chinese-made tires and US tariff policy, with several brokerages pointing to the third quarter as the cost peak.

At the same time, KRW 660.9bn for Hampyeong phase one and about KRW 860bn for Poland are proceeding in parallel, so capital spending competes with balance-sheet capacity and the dividend-restart discussion for the same funds.

Three things therefore need watching: the direction of the price-cost spread after the third quarter, actual progress on rezoning and selling the Gwangju site, and adherence to the Hampyeong and Poland construction schedules.

This material is for information purposes based on disclosures and press reports and contains no buy or sell opinion and no target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.