Japan Essentials - 19 May 2026

Research evidence excerpt

Japan Essentials - 19 May 2026

%) 12.9 14.2 14.2 12.9

2% of revenue (Figure 10), further improving Kia's cost structure. PER rep (x) 8.5 7.0 6.3 6.3

Robotics America (in which we expect Kia to own 40% stake), should be EV/EBITDA (x) 3.7 3.3 3.0 3.0

P/BV (x) 1.0 0.9 0.9 0.8

considered as an emerging SOTP upside driver, offering direct exposure Total div yield (%) 4.2 5.0 5.4 5.8

to humanoid robotics commercialisation. While near-term earnings

contribution is likely to be limited, the value of the stake should become Quant (rank vs. global sector) 36 / 551

more apparent as milestones in mass-production, cost-down, and

industrial deployment are achieved.

• Underappreciated robotics play. Unlike its sister company Hyundai, Kia

has yet to benefit from a valuation re-rating on robotics despite it co-

investing and co-benefiting from humanoid deployment (Kia share price

+35% CYTD vs Hyundai +122% and KOSPI +78%). We believe clarification

around business structure (and ownersship) should work as a catalyst to

narrow the performance gap to Hyundai.

Earnings changes: Our earnings estimates are unchanged.

Valuation: We increase our TP by 26% from Won230,000 to Won290,000

as we reflect economic gain of humanoid robot deployment (raising mid- 000270 KS rel KOSPI performance,

& rec historyterm EBITDA forecast by Won3.0tn) and incorporate Robotics America for

humanoid robot mass production.

Catalysts: Share buybacks; SDV update; HEV lineup expansion.

Investment Thesis and Recommendation

Kia is delivering a fast yet profitable ICE-to-EV transition, with its OPM for

BEVs/HEVs in the mid-single/low-double digits. FCF generation is strong,

and we expect it to improve further, allowing room for higher shareholder Source: FactSet, Macquarie Research, May 2026 (all figures in

returns.