NK EDM Poised to Benefit from Expanding Submarine Exports... Emerging as a Key Defense Equipment Supplier

NK EDM, the defense subsidiary of KOSPI-listed NK, announced on April 28 that it is strengthening its position as a key equipment supplier, in line with the trend of domestic shipyards expanding their submarine exports. Based on this, expectations for mid- to long-term performance growth are also rising.

The company has already signed memorandums of understanding (MOUs) with major domestic shipyards regarding export submarine projects and has completed submission of preliminary quotations. There is widespread evaluation that, once technical reviews and price negotiations are conducted, this could likely lead to actual equipment orders. The fact that NK EDM proactively established a foundation for equipment installation during the early stages is also seen as a positive factor.

NK EDM's core competitiveness lies in its hydraulic and pneumatic technology, as well as its foundational expertise in pressure tank manufacturing. With decades of accumulated technical capabilities, the company has independently developed submarine equipment that delivers stable performance even in high-pressure and demanding environments. In particular, NK EDM has drawn attention for localizing critical equipment that previously relied heavily on foreign technology, thereby increasing its technological self-reliance.

The company is also supplying major equipment to the latest Korean submarine, the KSS-III Batch-II. These pieces of equipment are high-difficulty products that must meet strict noise and vibration standards, and NK EDM has already secured the necessary technology and experience. Such delivery records and reliability are expected to further enhance its competitiveness in future export projects.

Currently, submarine export projects targeting multiple countries, including Canada, are being pursued mainly by domestic shipyards, and NK EDM is widely considered a likely supplier of the same equipment. As demand for defense-related products expands globally due to changes in the security environment, it is expected that the company's performance will be quickly reflected as shipyard orders ramp up.

If multiple ongoing projects are confirmed in sequence, the company is expected to enter a full-fledged growth trajectory. Given the long-term supply structure characteristic of submarine projects, there is a high likelihood of a continued stable revenue stream, which is also seen as a positive factor.

As more than half of the company's current revenue comes from submarine-related business, the expansion of export markets is a key variable directly linked to growth potential. The size of the global submarine market is estimated at around 70 trillion won, which suggests an environment where demand could increase significantly compared to the past.

Industry experts believe that if major projects are realized, NK EDM will likely maintain both stability and growth, continuing the trend of expanding performance. Furthermore, the company is systematically establishing and operating essential security systems for the defense industry, earning positive evaluations in terms of technological reliability as well.

A company representative stated, "Amid the trend of strengthening national defense and localizing advanced equipment, our technological capabilities are being further highlighted," adding, "We will secure a foundation for long-term orders and develop the defense business into a core growth engine for the group."

Meanwhile, NK has decided to conduct a reverse stock split to enhance shareholder value, resulting in a trading suspension from today until May 21. The new shares following the split are scheduled to be listed on May 22.

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