1. What Happened?

Hankook Tire announced plans to increase its dividend payout ratio to 35% over the next three years, starting in 2025, and to implement interim dividends. However, the company also announced plans for significant investments in plant expansions in Tennessee, USA, and Hungary, suggesting further dividend increases are possible after these investments are completed.

2. Why is This Important?

This announcement is crucial as it represents a strengthened shareholder return policy, directly benefiting investors. Simultaneously, the large-scale investments, while essential for securing future growth momentum, could create short-term financial burdens.

3. What’s Next for Hankook Tire?

Positive Factors

  • Business Diversification: Acquisition of Hanon Systems allows entry into the automotive thermal management system market. Expected benefits from the growth of the EV market.
  • Solid Tire Performance: Strong sales of high-inch and EV tires, and maintaining a strong presence in the OE market.
  • Future Technology Investment: Strengthening the ‘iON’ EV tire lineup, developing airless tires, and efforts to preemptively capture the future mobility market.

Negative Factors

  • Hanon Systems’ Profitability Decline: Potential burden on consolidated financial statements.
  • Raw Material Price Volatility: Increased cost burden and potential decline in profitability.
  • Global Economic Slowdown: Concerns about decreased demand for automobiles and tires.

4. What Should Investors Do?

Long-term Investors: Maintain a long-term investment perspective, considering the growth potential and shareholder return policy.

Short-term Investors: Closely monitor macroeconomic indicators, Hanon Systems’ performance, and the implementation of the dividend policy, responding flexibly to market conditions. Consider a dollar-cost averaging strategy.