[Click eStock] Pungsan Forecasts Record-Breaking Q2 Performance... Target Price Raised to 86,000 Won↑

Kiwoom Securities raised the target price for Poongsan to 86,000 KRW on the 2nd, citing expectations of record-breaking performance in the second quarter. The investment rating was maintained as 'Buy.'

In a report on the same day, researcher Jonghyung Lee of Kiwoom Securities explained, "Poongsan's stock price has been rallying to an all-time high since mid-April, driven by defense export expectations in the first quarter and rising copper prices in the second quarter," adding, "We are raising the earnings forecast and target price reflecting the first-quarter results and recent industry conditions." However, considering the sharp rise in stock price since the beginning of the year, it was excluded from the sector top picks.

Poongsan's first-quarter operating profit was 54.2 billion KRW, exceeding Kiwoom Securities' estimate of 34.1 billion KRW and the recently revised consensus of 49.5 billion KRW. Researcher Lee analyzed, "Despite the seasonal off-season, strong exports led to headquarters defense sales of 174.3 billion KRW, surpassing the initially expected early 100 billion KRW range," and added, "The copper division also showed a recovery in shipments compared to the previous year for the first time in six quarters, and inventory-related profits due to rising copper prices turned positive, driving improved performance."

For the second quarter, record-breaking performance is anticipated due to strong defense sales and rising copper prices. Accordingly, Kiwoom Securities presented an above-expectation earnings forecast with a separate basis pre-tax profit guidance of 110 billion KRW for Poongsan in the second quarter. In particular, the defense sales guidance was set at a record high for the second quarter, totaling 341.8 billion KRW, including 231.8 billion KRW in exports and 110 billion KRW in domestic sales.

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