NH Investment & Securities predicted on the 25th that as security threats in the Middle East region rise, Hyundai Rotem is expected to record its highest quarterly operating profit in history in the second quarter of this year. Consequently, it raised its target stock price to 250,000 won, a 29% increase from the previous target, while maintaining its investment opinion as 'Buy.' In the last transaction, Hyundai Rotem closed at 200,000 won.
Lee Jae-gwang, a researcher at NH Investment & Securities, noted, 'The increase in security threats in the Middle East is expected to accelerate the pace of ongoing K2 tank contract negotiations with Middle Eastern countries, prompting a revenue estimate increase.' He explained, 'Currently, Middle Eastern countries like Saudi Arabia, the UAE, Egypt, and Iraq are pushing for projects to replace aging tanks, and the geopolitical tension and security threats in the region have heightened due to Israel's and the U.S.'s strikes on Iran's nuclear facilities, thus accelerating the project pace.'
According to NH Investment & Securities, Hyundai Rotem is expected to record sales of 1.23 trillion won in the second quarter of this year, a 12.4% increase compared to the same period last year, with operating profit projected to reach 211 billion won, an 87% increase. This marks the largest quarterly operating profit size following the first quarter of this year. The increase in the number of K2 tank deliveries to Poland was noted as the reason for this by the researcher.
The researcher stated, 'The K2 tank is ahead of Germany's Leopard-2A8 in terms of delivery and price, and the Turkish Altay tank has potential political clash possibilities with Middle Eastern countries, which is expected to increase the K2's popularity.' He added, 'Currently, 100 units of K2 are being produced, but without any additional factory expansion, it is possible to produce 200 units.'