Hyundai Rotem Secures Major Deals in Iraq and Romania [Click eStock]

K2 Positioned as a Key Asset in EU Rearmament

There are projections that Hyundai Rotem will benefit from the rearmament boom among European Union (EU) countries.

On October 21, Daol Investment & Securities maintained its target price for Hyundai Rotem at 3.1 million won and its "Buy" investment rating, citing this background. As of 10:53 a.m. on the same day, Hyundai Rotem's share price stood at 212,000 won.

Previously, in 2022, Hyundai Rotem signed the first execution contract (EC1) with Poland, exporting 180 K2 tanks in a deal worth 4.5 trillion won. Subsequently, this year, the company signed a second execution contract (EC2) for 117 GF units and 63 PLF units, including development costs, ammunition, and logistics support, in a contract worth 8.9 trillion won. This structure guarantees performance through 2027.

Thanks to the local assembly plant in Poland, it is considered highly likely that contracts EC3 through EC5 will also proceed. As a result, Hyundai Rotem is expected to secure large-scale contracts every two years and ensure a steady stream of orders through 2033.

With the number of countries adopting the K2 increasing, there are projections that Hyundai Rotem's record-high performance will expand even further. It has been reported that Iraq will introduce 250 units in a deal worth 9 trillion won, and Romania is expected to sign a contract for 216 units plus an additional 76 units, totaling 11 trillion won.

Choi Kwangsik, a researcher at Daol Investment & Securities, stated, "Hyundai Rotem's main battle tank, the K2 MBT, is considered one of the key weapons systems in the EU's rearmament efforts." He added, "The International Institute for Strategic Studies (IISS) has suggested that the EU needs to procure 600 MBTs, and with the withdrawal of 87 MBTs when the US forces pull out from NATO, there is keen interest in the role Hyundai Rotem's Polish plant will play in the expansion of the K2 across Europe."

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