Eugene Securities noted on the 6th that Hyundai Rotem still has a lot of potential for additional growth, stating that the growth phase has just begun. The target price remains at 245,000 won, and the investment opinion is maintained as 'buy.'
Hyundai Rotem's second quarter performance this year was recorded at sales of 1.4176 trillion won and operating profit of 257.6 billion won. This is a strong performance that exceeds the market expectation (consensus) of 240.1 billion won in operating profit.
By institutional sector, both defense and railways are growing. The total number of K2 tanks being exported to Poland this year is projected to be 96, with 47 units expected to be delivered in the second half. Following the second contract signed on the 1st, additional quantities have also been secured.
Forecasts suggest that as deliveries continue steadily after next year, performance growth is also expected to follow. The delivery quantity of K-2GF for Poland next year is expected to be 48 units, with the domestic fourth mass-produced products to be supplied. In the second half of next year, performance reflection for the 2027 quantity is also expected to intensify. Since Hyundai Rotem recognizes revenue based on the progress of the Polish projects, there is expected to be no gap in future annual sales and profits.
In addition to Poland, there are several other export contracts under negotiation. Following Eastern Europe and the Middle East, the possibility of exports to Western Europe has recently emerged. With a local production base secured in Poland, additional export opportunities to neighboring countries are also expected to increase.
Yang Seung-yun, a researcher at Eugene Securities, said, "With exports added to the quantities of tanks for Poland and domestically, long-term growth is expected," adding, "In the railway business, based on a massive backlog of orders amounting to 18.3 trillion won, preparations for substantial growth in the late 2020s are underway."