[Click e-Stock] "Poongsan, Korean Defense Supplies Expanding Across Europe"

On August 20, Korea Investment & Securities analyzed that exports of ammunition by Poongsan are increasing.

Choi Moonseon, a researcher at Korea Investment & Securities, explained, "According to the monthly export data for ammunition and related items provided by the Korea Customs Service, in July, Sweden imported $65.7 million and the United Kingdom imported $25.1 million worth of Korean ammunition."

He added, "These amounts exceed the total value of ammunition imported from Korea over the past 15 years from 2010 to 2024," and emphasized, "The shortage of ammunition supply in Europe persists." Furthermore, he stated, "Other countries in Europe may also show demand," and "The trend of Korean defense supplies spreading within Europe continues unabated."

Choi also noted, "Saudi Arabia and Iraq have been major regions for Korean ammunition exports," but analyzed, "Since 2020, there have been no exports to Iraq, and exports to Saudi Arabia have also plummeted." He expressed optimism, saying, "Rising tensions in the Middle East could stimulate demand for Korean defense supplies in these two countries," and "New opportunities may emerge in the Middle East."

Poongsan posted a consolidated operating profit of 93.6 billion won in the second quarter of this year, falling short of the market expectation of 113 billion won. Choi explained, "Labor costs in the second quarter increased by 24 billion won compared to the previous quarter," and added, "Both the non-ferrous metals and defense businesses performed strongly, leading to higher operating rates and, consequently, increased labor costs." He pointed out, "Market expectations did not properly account for the increase in labor costs," and advised, "It is unreasonable for investment sentiment to deteriorate excessively."

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