Hankook Tire & Technology is forecast to achieve record-breaking quarterly revenue in Q2 this year, driven by the Hanon Systems acquisition and strong high-inch tire sales, according to a consensus released on the 19th. The company is projected to post consolidated revenue of 5.6388 trillion won and operating profit of 527.7 billion won for the quarter, representing year-over-year increases of 5.01% and 49.23% respectively, based on forecasts from six major securities firms surveyed by Yonhap Infomax within the past two months. Despite concerns over margin pressure from rising raw material costs, analysts expect the tire manufacturer to maintain quarterly operating profit above 500 billion won through superior pricing power, marking the fourth consecutive quarter at this profit level.
Hankook Tire Projects Record Q2 Revenue of 5.6 Trillion Won
If the forecast proves accurate, Hankook Tire will enter the 5.6 trillion won revenue range for the first time in a single quarter since its founding. All six securities firms projected operating profit above 500 billion won, demonstrating consensus on the company's strong quarterly performance. The operating profit figure of 527.7 billion won would represent the fourth consecutive quarter the company maintains profit above the 500 billion won threshold.
Hanon Systems Acquisition Contributes 2.9 Trillion Won to Quarterly Sales
The solid earnings outlook stems primarily from the consolidation of Hanon Systems' thermal management division following last year's capital increase and acquisition. The thermal management segment is analyzed to contribute approximately 2.9 trillion won in stable revenue this quarter, driving overall company sales growth. The tire division is also expected to see growth led by price increases in major domestic and international markets and surging sales of all-weather tires.
Analysts Highlight Favorable Pricing Environment in US Market
"The recent macroeconomic environment causing inflation is a period where tire companies can aggressively implement price pass-through," said Yoo Ji-woong, analyst at Daol Investment & Securities. "Favorable price increases will be possible in the second half of this year, centered on the US market." He added that "external conditions are also working favorably, as the EU anti-dumping tariff was set at 3.3%, giving the company an advantageous position of over 20% compared to domestic competitors."
Raw Material Cost Increases Begin Narrowing Profit Margins
The cost-price spread (margin) began narrowing partially last month due to rising raw material prices. Oil and rubber price increases stemming from Middle East geopolitical risks are expected to be fully reflected in second-half costs with a time lag. Hankook Tire's supply capacity is scheduled to expand rapidly as the second expansion volume from the Tennessee plant in the US begins supply from Q3 this year, and new truck and bus radial (TBR) tire production volume starts operation from Q4.
Stock Closes at 73,600 Won with Target Price Near 90,000 Won
Hankook Tire's stock closed at 73,600 won on the 16th. The average target price from securities firms that submitted consensus forecasts was formed near 90,000 won, suggesting potential upside of approximately 22% from current levels.
FAQ
What is Hankook Tire's projected Q2 operating profit?
Hankook Tire & Technology is projected to post operating profit of 527.7 billion won in Q2 this year, representing a 49.23% year-over-year increase, according to consensus from six major securities firms surveyed by Yonhap Infomax on the 19th.
How much revenue does Hanon Systems contribute to Hankook Tire's quarterly sales?
The thermal management segment from Hanon Systems, acquired last year, is analyzed to contribute approximately 2.9 trillion won in stable revenue this quarter, helping drive the company's forecast record quarterly revenue of 5.6388 trillion won.
