DB Securities noted on the 18th that Poongsan is expected to demonstrate the epitome of "structural growth" with continuous growth in exports and stable domestic expansion. It is also anticipated that revenue and profit will increase due to the rise in contract volumes for munitions and demand for high-value-added products. The target stock price has been raised from 89,000 won, proposed in November of last year, to 230,000 won, while maintaining the investment opinion at "buy."
Poongsan's consolidated revenue for the second quarter of this year is projected to be 1.3 trillion won, with operating profit expected to be 111.8 billion won. Revenue is expected to increase by 7% compared to the same period last year, but operating profit is forecasted to decrease by 30%. The copper processing business, which is part of its non-ferrous metal sector, is expected to benefit from a recovery in product sales and rising copper prices positively impacting sales prices. While the defense sector has seen a slight decline in revenue and export proportions, robust profitability is anticipated based on existing contracts.
Analyst Ahn said, "Growth in the defense sector is expected to continue into 2026," adding, "The expansions for large-caliber ammunition will be reflected, and additional orders are anticipated from Poland's second contract and other countries."
In particular, Poongsan FNS, a 100% subsidiary, is expected to achieve revenue of 80 billion won this year, with a profit margin of around 30%. The main product, the new-type projectile, is expected to have a high profit margin as a high-value-added product. Additionally, the expansion of production facilities worth 30 billion won that began this month is expected to be completed within a year, and further investment plans are also in place until 2029.
Analyst Ahn stated, "Production of the extended-range ammunition will begin this year, adding high-value products to the portfolio," noting, "The government project for drone development and electrification is also underway."