[Click eStock] "Poongsan: Copper Leads, Defense Drives... Target Price 103,000 Won"

On September 8, NH Investment & Securities initiated coverage on Poongsan, assigning a "Buy" investment rating and a target price of 103,000 won. The firm cited continued strong copper product prices and the solid performance of the copper alloy (shindong) segment as reasons for its outlook.

Youngkwang Choi, a research analyst at NH Investment & Securities, explained, "The stable performance of the copper alloy division, along with heightened security awareness and increased demand for military supplies due to geopolitical risks, will drive Poongsan's mid- and long-term earnings growth."

The performance of the copper alloy segment is expected to remain robust, supported by the persistent strength in copper prices. Historically, copper prices, Poongsan's stock price, and the results of the copper alloy business unit have closely moved together. According to the International Copper Study Group (ICSG), the global copper mine operating rate, which remained above 80% from 2022 to 2025, fell below 80% in 2026. As of the cumulative total in June 2026, global copper mine concentrate output was 11.34 million tons, representing a 1.1% decrease compared to the same period last year. Analyst Choi noted, "Copper product prices are staying strong amid structural copper concentrate supply shortages, which are being caused by mining operation disruptions and declining concentrate grades, as well as negative treatment charges (T/C). Should tariffs on imported copper be imposed by the U.S., we anticipate further price increases."

Structural growth is expected to be led by the defense business. This projection is based on stable ammunition sales to the South Korean military, increasing sales of ammunition packages due to rising exports of Korean defense products like K9 self-propelled howitzers and K2 tanks, and the growth of direct ammunition exports to overseas defense ministries and defense companies. Analyst Choi stated, "With the outbreak of the Middle East war in the first half of 2026 and resulting shipment disruptions, deferred sales are expected to be realized gradually starting in the second half of the year. We expect the defense segment's sales revenue and operating profit to record significant growth in 2027."

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