Daishin Securities said on the 10th that expectations remain high for Hyundai WIA's expansion into new businesses, including in-house robots and thermal management for data centers. It raised its target price to 105,000 won from 95,000 won and maintained a Buy rating. Hyundai WIA's closing price in the previous trading day was 91,300 won.
Hyundai WIA runs a defense business centered on artillery systems and supplies the K2 tank and K9 self-propelled howitzer guns. The defense business, which posted 186 billion won in annual sales in 2022, has grown to 400 billion won in annual sales as K2 deliveries ramped up. This year, with recognition of the second batch of K2, it secured visibility for solid growth of more than 10% on an annual average.
Kim Gwiyeon, an analyst at Daishin Securities, said, "The likelihood of a ground war in the Middle East is currently low, so the potential for direct benefit is limited, but if geopolitical risks persist, its relative appeal as a defense beneficiary will stand out."
Daishin Securities also noted that the sale of the machine tool business last year laid the groundwork for investment in future businesses.
Kim said, "Development of the thermal management business and mass-production investment are moving into full swing, there is expansion investment in key parts centered on India, and the company has secured in-house robot capabilities, with plans even to pilot-build a dark factory (a fully unmanned plant)," adding, "A re-rating is also expected as investment costs are recovered."