[Click eStock] Hyundai Rotem, Earnings Estimates Raised... Target Price Up to 82,000 KRW

Meritz Securities on the 30th raised the target price for Hyundai Rotem from 58,000 KRW to 82,000 KRW, citing growth in order backlog and expansion of export countries. The investment rating was maintained as 'Buy.'

Jiho Lee, a researcher at Meritz Securities, stated in a report released that day, "Defense Solutions aims to complete early delivery of K2 tanks for Poland, rapidly expanding the export ratio, and from this quarter onward, Rail Solutions is expected to contribute to earnings." He explained, "We raised the target price reflecting the upward revision of earnings estimates for the two business divisions and the increase in book value per share (BPS) due to the extension of the 12-month forward (12M Fwd) reflection period."

Hyundai Rotem's third-quarter sales recorded 1.1 trillion KRW, an 18% increase compared to the same period last year, and operating profit rose 234.2% to 137.4 billion KRW, significantly exceeding the operating profit consensus.

Researcher Jiho Lee analyzed, "Defense Solutions showed steady growth with a higher export ratio compared to the previous quarter," and "It was an earnings surprise contributed by all major business divisions."

The second contract for Poland's K2 is in its final stages, with a high possibility of being signed within the year. Although there are some concerns about contract completion due to multiple delays, circumstances have been identified where additional requests beyond the K2 items were made, and the expected amount is anticipated to increase from the previous 4 trillion KRW range to over 6 trillion KRW.

Researcher Jiho Lee forecasted, "Recently, Poland has shown high demand for weapons by deciding to purchase Korean-made weapons without financial support, so we highly expect the second contract to be signed within the year with an increased amount," and "Additionally, there is a high possibility of signing a contract for Romania next year (approximately 250 to 300 units, over 5 trillion KRW)."

This content was produced with the assistance of AI translation services.