[Edaily Reporter Kim Hyung-il ] DB Securities forecasts that HANKOOK TIRE & TECHNOLOGY(161390)will continue to see improved earnings as cost pressures ease and the effects of price hikes take hold. The firm maintained its “Buy (BUY)” rating and raised its target price from 83,000 won to 88,000 won.

On the 12th, Nam Ju-shin, an analyst at DB Securities, stated, “Second-quarter revenue reached 5.682 trillion won and operating profit reached 559.1 billion won, exceeding the consensus estimates (revenue of 5.639 trillion won and operating profit of 534.0 billion won),” and “The tire division recorded revenue of 2.81 trillion won and operating profit of 483.2 billion won, marking its highest-ever quarterly revenue and strong profitability,” he analyzed.

He continued, “Earnings were driven by increased sales volume resulting from demand for replacement tires (RE) and expanded supply of original equipment (OE) tires, improvements in selling prices and product mix, and a growing share of 18-inch and larger tires in Europe and North America,” explaining that “the weak non-operating income and loss was a temporary factor unrelated to the core business, caused by foreign exchange valuation losses due to the strengthening of the Hungarian forint.”

While cost pressures are expected to persist in the third quarter, the firm projected that raw material costs would peak around August. Analyst Nam stated, “Contract prices in the third quarter will decline compared to the second quarter,” adding, “Price increases of 2–4% are underway in major regions—starting in the Middle East in June and continuing through September—which should largely offset the rise in costs.”

Although transportation costs rose compared to the first half of the year, the firm projected that the burden could be alleviated through renegotiation should the shipping market decline. In the medium to long term, the firm highlighted improvements in the mix of high-inch and electric vehicle (EV) tires, the expansion of local production in North America, and market share growth leveraging low anti-dumping duty rates in Europe.

Researcher Nam said, “We have raised the target price to 88,000 won by applying a price-to-earnings ratio (PER) of 8.4—the average for global tire companies—to the 12-month forward earnings per share (EPS) of 10,560 won,” and "We believe the company will be able to maintain stable earnings momentum starting in the fourth quarter, driven by easing cost pressures, an increased share of high-inch and EV tires, and rising market share in Europe," he said. He added, "The company will also increase its interim dividend for 2026 to 900 won per share, continuing its policy of strengthening shareholder returns."