[Special Stock] Hyundai Rotem Rises 7% on News of 98.5 Billion KRW Contract with Defense Acquisition Program Administration

Hyundai Rotem is rising nearly 7% on the 3rd following news of a contract with the Defense Acquisition Program Administration worth 98.5 billion KRW for K2 tank hull and turret.

On the 2nd, Hyundai Rotem's K2 tank was exhibited at the "Korea International Defense Industry Exhibition" held at Gyeryongdae, Chungnam. Photo by Jinhyung Kang aymsdream@

As of 2:24 PM that day, Hyundai Rotem was trading at 53,800 KRW, up 7.17% (3,600 KRW) from the previous trading day.

Hyundai Rotem announced that it signed a performance-based contract with the Defense Acquisition Program Administration worth 98.5 billion KRW for the "K2 tank hull and turret." This amount corresponds to 2.7% of last year's consolidated sales. The contract period is until September 30, 2029.

On the 20th of last month, Hyundai Rotem's stock price rose intraday to 69,500 KRW, setting a new 52-week high, but then weakened following news that a ceasefire agreement between Israel and the Lebanese armed group Hezbollah was imminent, causing the price to fall below 60,000 KRW on the 26th of last month.

Although the stock price remains in the 50,000 KRW range, the outlook from securities firms is not negative. KB Securities raised Hyundai Rotem's target price from 75,000 KRW to 82,500 KRW on the 20th of last month, reflecting upward revisions in earnings estimates.

Jung Dong-ik, a researcher at KB Securities, said, "It is necessary to pay attention to the continuing order momentum," adding, "In the fourth quarter, an execution contract for 180 units of the K2 tank Polard 2-1 phase is expected to be signed, and since various options will be added to the second phase contract, the second contract amount is expected to significantly exceed 4.5 trillion KRW. In addition, the fourth mass production contract for the Korean military (150 units, about 2 trillion KRW) is also expected to be concluded in the fourth quarter, and the first contract for Romania, expected to be between 100 and 150 units, is likely to be possible by the first half of next year at the latest."

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