KB Securities said it expects Poongsan's share gains to continue, citing the view that global ammunition demand remains high, as seen in orders for large-caliber rounds for Hyundai Rotem.
According to KB Securities on the 15th, Poongsan on the 12th disclosed an order for 120mm large-caliber ammunition worth 829.8 billion won for Hyundai Rotem. It was tallied at 18.2% of Poongsan's total sales.
KB Securities assessed that, for the second contract for Poland's K2 120mm ammunition, the 120mm ammunition volume more than doubled from the first contract, while the average selling price (ASP) rose more than 40%.
Choi Jong-hyun, a KB Securities researcher, said, "As more weapons systems are deployed in the global market, demand for ammunition is increasing further," adding, "Poongsan's gains from K2 and K9 exports will also continue."
After Poongsan's order disclosure, the stock rose 4.8%. Given that Poongsan's orders followed Hyundai Rotem's Poland order disclosures in the past, this order disclosure appears to have been priced into the stock.
Choi said, "Poongsan has also expanded production facilities for 155mm in addition to 120mm," adding, "If performance visibility related to 155mm ammunition improves, the stock rally is likely to resume."