Kumho Tire makes and sells tires for passenger cars, trucks and buses, earning its money from OE tires for new vehicles and from higher-margin RE replacement tires, with North America the largest region at about a third of total revenue. Its recent strategy is premiumization — raising the average selling price per unit by increasing high-inch, high-performance tires and new-vehicle volumes — and its preliminary first-quarter results on April 28 held earnings similar to the year-earlier quarter, while in May it disclosed a rights issue by a subsidiary and an acquisition of shares in another company to relocate production, centered on Vietnam, toward Georgia in the United States to avoid U.S. tariffs. The point worth watching lately is that its ROE is the highest among its peers yet its P/E is the lowest and its FCF yield stands out, a clear undervaluation as a strength; on the other hand, a debt ratio of 273%, the 25% tariff falling on the Vietnam plant that handles 80-90% of exports to the U.S., and the pace of the Georgia-plant relocation are the conditions to watch that test this.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 273.0%).
- Revenue rose 3.7% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 3.2% lower than a year earlier.
- ROE is 17.1% (controlling-interest basis). It is above the sector average.
- Operating margin is 12.2%.
Ownership & governance As of 2025-12-31
Largest shareholder Singway Korea 45% (corporate)
Controlling bloc incl. related parties 45%
With the controlling bloc holding 45%, the ownership structure is stable.
🔎 In-depth analysis
- Kumho Tire makes and sells tires that go into passenger cars, trucks and buses.
- Revenue splits broadly into two streams: OE tires supplied to carmakers for new vehicles, and RE replacement tires that consumers buy when they change worn tires.
- Of the two, the higher-margin side is replacement tires, which command a brand premium.
- By region, North America is the largest at about a third of total revenue.
- Europe's share is growing fast, followed by China and Korea.
- The core of the recent strategy is "premiumization": raising the average selling price per unit by increasing high-inch, high-performance tires and new-vehicle volumes for finished cars.
- The recent close is ₩6,000 and the market cap is ₩1.7 trillion.
- The price sits above the 20-day line (₩5,088) and above the 60-day line (₩5,252).
- Being above both the short- and mid-term moving averages, the trend is on the healthy side.
- RSI (a supplementary gauge that weighs upward against downward strength over the last 14 days on a 0-100 scale) is 61.5, a neutral reading.
- The one-month change is +30.9%, the three-month change is +2.9%, and the position versus the 52-week high is -20.3%.
- Relative strength against the KOSPI is 39 (1-99, converted from returns versus the index over the past year with more recent performance weighted more heavily; higher means stronger than the market).
- That places it in roughly the top 62% by strength among all stocks.
- Over the past three months it lagged the index by 22.4%.
- It is best to read the chart alongside trading volume and the dates of disclosures.
- Profitability is distinctly good.
- ROE (how much is earned in a year on equity) is 17.1%, the highest among the three domestic tire makers.
- An operating margin of 12.2% and a net margin of 7.4% are also firm.
- Valuation, by contrast, is depressed.
- The P/E (how many times one year's earnings the share price is) is 3.9x and the P/B (how many times book net assets the share price is) is 0.67x, both low.
- On metrics that also reflect debt, the picture is even sharper.
- EV/EBIT (enterprise value divided by operating profit — a debt-loaded version of the P/E) is 4.6x, and EV/Sales (enterprise value divided by revenue) is 0.56x.
- The FCF yield (the ratio of cash actually generated to market cap — the higher, the more attractive the cash generation) is very high at 44.5%.
- In other words, the cash the company earns is itself ample.
- That said, there is a weakness to flag.
- The debt ratio (debt versus equity) is high at 273%.
- Net debt (pure debt after subtracting cash from total borrowings) also reaches about ₩1.3 trillion.
- It is accurate to read the low P/E as reflecting this financial burden together with tariff uncertainty.
- The trajectory of the past five years is a clear rebound story.
- In 2021 and 2022 it posted net losses.
- Then it grew its profit — net profit of ₩157.8 billion in 2023, ₩324.9 billion in 2024 and ₩347.4 billion in 2025.
- Revenue also grew by an annual average of about 16% over five years.
- That said, the pace of growth eased in 2025.
- Revenue rose 3.7% year on year, and operating profit edged down as the company took a breather.
- The first quarter of 2026 (cumulative) had revenue of ₩1,167.8 billion, operating profit of ₩147.0 billion and net profit of ₩103.4 billion, almost level with the year-earlier quarter.
- The company set a target of a record ₩5 trillion in revenue this year, grounded in expanded new-vehicle supply and premium replacement sales.
- Earnings, however, may not jump as much as revenue, because U.S. tariffs are a variable that presses on margins.
- Recent disclosures read across three strands — results, funding and investment.
- On April 28 it disclosed preliminary first-quarter results, holding earnings similar to the year-earlier quarter.
- In April it filed a series of documents related to a corporate-bond issuance, refinancing maturing borrowings.
- For a company with a lot of debt, whether a funding channel stays open is an important signal.
- In May it disclosed a decision on a rights issue by a subsidiary and a decision to acquire shares in another company, showing moves to reshape its overseas production and equity structure.
- This dovetails with the larger picture of relocating production, centered on Vietnam, toward the U.S. to avoid U.S. tariffs.
- The points to watch are clear.
- Kumho Tire is in a textbook undervaluation phase in which a company that earns well trades at low multiples.
- Its ROE is the highest among its peers, yet its P/E is the lowest.
- Its FCF yield also stands out.
- On pure results alone, it is a cheap spot.
- On the other hand, the cautions are just as clear.
- First, a debt ratio of 273% is a structure whose burden grows when rates or the industry wobble.
- Second, U.S. tariffs.
- If a 25% tariff falls on the Vietnam-plant volume that handles 80-90% of exports to the U.S., margins are pressed.
- The pace of shifting production to the Georgia plant in the U.S. is the key.
- In conclusion, low valuation and strong cash generation are the attractions, while high leverage and the speed of the tariff response are the variables that test them.
- Whether the undervaluation is resolved or maintained hinges on how quickly the tariff burden is absorbed.
🔎 Valuation vs peers Undervalued
The three large domestic tire makers, whose business substance is closest.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hankook Tire & Technology | 8.04x | 0.72x | 9.00% |
| Nexen Tire | 4.32x | 0.32x | 7.36% |
Against the three domestic tire makers, Kumho Tire's position is clear. ROE (profit relative to equity) is 17.1%, about double that of Hankook Tire (9.0%) and Nexen Tire (7.4%). Yet its P/E of 3.9x is the lowest of the three. It is a textbook undervaluation combination — top profitability but the lowest earnings multiple. The P/B of 0.85x is in the middle, but relative to ROE it is still cheap. That said, the low multiple is not free. High leverage of a 273% debt ratio and the margin variable of U.S. tariffs act as discount factors. The 3.9x P/E on last year's basis looking low is not an optical illusion, and with no clear grounds for a sharp drop in this year's earnings, the undervalued character holds on a forward basis too. Whether the tariff is absorbed, however, governs how fast this discount is resolved.
Price history Close · MA20 · MA60
The latest close is ₩6,000 and the market capitalization is ₩1.7 trillion. The price sits above its 20-day moving average (₩5,088) and above its 60-day moving average (₩5,252). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 61.5, a neutral level. The one-month change is +30.9%, the three-month change is +2.9%, and the position relative to the 52-week high is -20.3%. Relative strength versus the KOSPI is 39 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 39% of all stocks. Over the past three months it lagged the index by 22.4%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -22.44% / 6M -33.39% / 12M -47.62%
Key metrics vs sector median
Valuation
The P/E of 4.96x is below the sector median (12.90x). The P/B of 0.85x is in line with the sector median (0.75x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is 17.1%, above the sector average (6.0%). The operating margin is 12.2%. The debt ratio is 273.0%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.7B | $3.0B | $3.1B | +3.73% ↓ slower |
| Operating profit | $272.4M | $390.1M | $381.7M | -2.16% ↓ slower |
| Net profit | $104.6M | $215.3M | $230.2M | +6.93% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.7B | $2.4B | $2.7B | $3.0B | $3.1B |
| Operating profit | -$27.5M | $15.3M | $272.4M | $390.1M | $381.7M |
| Net profit | -$47.2M | -$52.3M | $104.6M | $215.3M | $230.2M |
| Revenue CAGR | 4-yr avg 15.95% | ||||
Revenue rose 3.7% year over year (2023 ₩4.0 trillion → 2024 ₩4.5 trillion → 2025 ₩4.7 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit fell 2.2% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 16.0%. The two-year revenue CAGR is 7.9%. In the most recent quarter (Q1 2026), revenue was 3.2% lower than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 17.1% points to solid profitability.
Points to watch
- Revenue rose 3.7% year over year, and the pace is slowing (3-year trend: rising).
Recent news & events searched · sourced
- 2026-04-28EarningsPreliminary consolidated Q1 2026 operating results — revenue of ₩1,167.8 billion, operating profit of ₩147.0 billion, net profit of ₩103.4 billion, holding a level similar to the year-earlier quarterConfirms that earnings strength was maintained even as revenue edged down. Read as a quarter in which growth eased but profitability was successfully defended. Source
- 2026-05-14FilingDecision on a rights issue by a subsidiary and a decision to acquire shares and investment securities in another company — moves to reshape overseas production and equity structureRead as capital allocation tied to production relocation and local response to avoid U.S. tariffs. A groundwork move to reduce tariff exposure over the medium term. Source
- 2026-04-22FilingFinalized issuance terms in the securities registration for a corporate-bond issuance — refinancing of maturing borrowings under wayA signal that the corporate-bond funding channel works normally at a company with a high debt ratio. Short-term liquidity concerns are not large, but the interest burden remains an item to keep monitoring. Source
- 2026-04-23IRNotice of an investor briefing (IR) — communicating results and business strategyAn occasion for the company to communicate directly with the market. A window to check progress on the premiumization and North America response strategy. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Corporate governance report
- 2026-05-14PeriodicQuarterly report
- 2026-05-14Disclosure
- 2026-05-14Paid-in capital increase
- 2026-05-14Amended filing
- 2026-04-28EarningsFair-disclosure notice
- 2026-04-23Disclosure
- 2026-04-23EarningsEarnings disclosure
- 2026-04-23Earnings disclosure
- 2026-04-23Disclosure
- 2026-04-22Disclosure
- 2026-04-17Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.