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Korean automakers Hyundai Motor and Kia Motors are bracing for a tough year ahead.
A weak yen makes cars from their Japanese rivals more attractive just as stuttering
global economic growth is affecting sales in the world's major markets.
Ji Myung-kil reports. Hyundai Motor and Kia Motors have ranked rock bottom among the world's
biggest automakers in terms of EPS or Earnings Per Share which measures a company's profitability.
Market analysts say the weakening Japanese yen and the strong Korean won are negatively
impacting Hyundai and Kia's overseas sales.
The estimated annual operating profit growth for Hyundai from 2012 to 2014 is seven percent.
Kia Motors is at 5-point-7 percent, significantly lower than the Japanese company rivals which
are in the 20 percent range.
On top of that, Hyundai and Kia's PER, or price-to-earnings ratio, which measures a
company's total market capital value over its earnings, was among the lowest out of
the world's major automakers.
Hyundai's price-to-earnings ratio was 6-to-1 while Kia was 5-point-6-to-1.
Japan's Toyota was the highest with 12.
The average PER was 9-point-1.
Analysts say that, since Hyundai and Kia's share prices are undervalued, it is likely
their stock prices will increase in the future as a low PER attracts more investors.
Experts say Hyundai and Kia need to build additional factories and invest in premium
brands to maintain their strong growth patterns.
Ji Myung-kil, Arirang News.