[Click eStock] "Even Full-Capacity Factories Fall Short"... Which K-Defense Companies Will See Orders Materialize?

There are projections that Hyundai Rotem will break out of its undervalued phase as its overseas defense orders become more visible at a faster pace.

On the 2nd, a model of Hyundai Rotem's next-generation tank was exhibited at the 'Republic of Korea International Defense Industry Exhibition' held at Gyeryongdae, Chungnam. Photo by Jinhyung Kang aymsdream@

On June 2, Yang Seungyun, a researcher at Eugene Investment & Securities, stated, "Defense orders targeted for this year are expected to materialize in the second half," adding, "We maintain our 'Buy' investment opinion on Hyundai Rotem with a target price of 316,000 won."

The assembly line at Hyundai Rotem's Changwon defense plant is currently operating at full capacity. Researcher Yang explained, "When I visited the Changwon defense plant on May 29, I saw the assembly lines packed with Poland EC-2 units," and added, "It is estimated that a significant portion of the 116 K-2GF units contracted for Poland are currently under production, and the number to be delivered this year is expected to greatly exceed the planned 30 units."

He continued, "There will be an increased need to secure additional defense export volumes and to produce tanks and armored vehicles, as well as a higher demand for K-2 overhaul services," adding, "Two railway factories are being proactively converted into defense plants to expand production capacity."

The defense pipeline is expected to expand further. Researcher Lee said, "In addition to the previously known Iraq and Romania, I heard from the company that export negotiations are also underway with countries in Asia, Africa, and Northern Europe," and added, "If orders are confirmed in the future, I am confident there will be no concerns about performance growth."

He also stated, "In addition, domestic and overseas production is also proceeding rapidly at the railway assembly plants," and added, "Considering the contracts and delivery schedules for high-margin export volumes, profitability is expected to improve in earnest from this year onward."

This content was produced with the assistance of AI translation services.