SEOUL, KOREA - KRW-based export ASP rebounds for third straight month in Apr Kia Motors’ (Kia) export ASP continued to trend up in Apr, according to data from the Korea Automobile Manufacturers Association. Specifically, export ASP climbed 5.5% YoY to USD13,322, the highest since USD13,568 in Jul 2011. And backed by a higher KRW/USD rate since Feb, KRW-based export ASP firmed 4.2% YoY to W14.94mn, up from W13.25mn in Jan. We attribute the robust results to solid exports of minivans and premium sedans. Outbound shipments of the Carens jumped to 5,697 units in Apr from 2,243 a year earlier due to the new model launch, while exports of the K7 and Carnival ballooned 345.5% YoY to 2,156 units and 38.8% YoY to 3,777 units, respectively. K9 exports, which began in Sep 2012, reached 282 units in Apr.
Trio of positives in Apr portend strong 2Q13 results Apr ASP growth is about three times higher than our 1.8% YoY growth estimate for 2Q13. In addition, volume growth (+8.7% YoY) and the KRW/USD rate (W1,121) were also higher in Apr than our 2Q13 outlook (1.6% YoY growth, W1,064). As such, the estimate-beating export ASP and sales volume amid a more favorable FX rate portend robust 2Q13 earnings. We believe sales will continue to grow and ASP will continue trending up, on: 1) rapidly improving quality and a firming brand image, 2) the growing weighting of more competitive new models, and 3) a favorable KRW/USD rate. Meanwhile, Hyundai Motor’s Apr export ASP rose 2.6% YoY to USD16,123, the third highest in its history.
Valuation
As such, we believe shares will continue to rebound. We maintain BUY and a 12M TP of W79,000 at 8x 12MF PE, the sector’s average.
*Source: Korea Investment & Securities Co.
