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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Seoul, April 24, 2025 — Kiwoom Securities announced on Wednesday that Nexen Tire faces mounting challenges due to both U.S. anti-dumping duties and new product tariffs. As a result, the brokerage maintained its Marketperform rating but lowered the target price from KRW 6,100 to KRW 5,700.
The firm projects Nexen Tire’s Q1 revenue at KRW 753.3 billion, up 11.1% year-on-year, with an operating profit of KRW 39.2 billion, down 5.7% from the same period last year—slightly outperforming market expectations on profitability.
Kiwoom highlighted that the company has faced rising burdens in net working capital due to a sharp increase in inventories and receivables since late 2023. Although Nexen secured natural rubber in anticipation of EU Deforestation Regulation (EUDR) compliance, the materials are still in inventory and not yet in use.
“Nexen Tire does not have a manufacturing base in the U.S., making it vulnerable to the recently imposed product tariffs on PCLT (passenger car and light truck) tires under the Trump administration,” Kiwoom said. “We believe the company is currently accelerating shipments to stockpile inventory in the U.S.”
In addition, Nexen Tire is transitioning from a wholesale to retail-focused distribution strategy in North America, which may lower receivables turnover. While positive from a structural reform perspective, the firm noted that it increases financial strain amid growing industry uncertainties due to tariffs.
Kiwoom added that a final ruling on U.S. anti-dumping duties for shipments between July 2022 and June 2023 is expected later this month or early May. Since anti-dumping duties are separate from product tariffs, both can be imposed simultaneously—potentially creating an even heavier earnings burden if duty rates exceed expectations.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
