DB Securities evaluated that Hyundai Rotem is approaching a period of steep profit growth as the export pipeline for tanks increases in the Middle East and Europe on the 20th. The investment opinion is "buy" and the target price is 250,000 won. Hyundai Rotem's closing price the previous day was 174,200 won.
DB Securities researcher Seo Jae-ho analyzed that the potential demand in the Middle East reaches 67 trillion won. He noted, "The replacement potential demand under the weapon modernization trend in the Middle East amounts to 67 trillion won," adding, "There exists a potential demand of about 1,055 units, including 510 tanks for Saudi Arabia, 313 for the UAE, 230 for Iraq, and 12 for Qatar."
Regarding Hyundai Rotem's tanks, it was explained that they have demonstrated similar specifications to globally trusted tanks that recorded a 100% hit rate in joint exercises in Qatar and the UAE.
The researcher added, "With relatively ample capacity, we believe there is a high possibility of export to the Middle East."
The schedule for the second shipment to Poland is projected to be later than expected. However, it was analyzed that the potential pipeline is expanding, including early delivery to Poland and opportunities in Romania, Slovakia, and Morocco.
The researcher explained, "Global tank demand is expanding and the capacity shortage situation continues." He added, "Considering Hyundai Rotem's capacity expansion plans, it is highly likely that the gap in deliveries will be filled with orders that are below the surface. There is also ample room to raise performance estimates in line with order visibility."