Hyundai Rotem's shares fell more than 15% in early trading after the company reported second-quarter results that fell short of market expectations. Analysts have also lowered their target prices amid concerns over declining performance and delays in export contracts.
As of 10:05 a.m. on July 27, Hyundai Rotem's stock was trading at 133,600 won, down 24,800 won (15.66%) from the previous trading day. During the session, the stock dropped to 134,600 won, marking a 52-week low.
On July 24, Hyundai Rotem announced that its consolidated operating profit for the second quarter was 232.4 billion won, a 9.7% decrease compared to the same period last year. Revenue for the same period rose 13.3% to 1.606 trillion won.
Following the earnings announcement, several securities firms quickly adjusted their target prices downward.
Shinhan Investment Corp. described Hyundai Rotem's second-quarter results as an 'earnings shock,' lowering its target price to 230,000 won. Analyst Lee Dong-heon noted, "Revenue fell 5% and operating profit was 14% below consensus, indicating that despite growth in size, profit increases did not meet expectations."
Korea Investment & Securities also revised its target price down to 270,000 won. Analyst Jang Nam-hyun stated, "The second-quarter operating profit was 14% below consensus, and delays in securing new export contracts have been noted. Additionally, negotiations for the Iraq project, which were expected to conclude in the first half of the year, have been halted due to the ongoing conflict in the Middle East." He added, "As a result, we have adjusted our annual operating profit estimate for next year from 1.7891 trillion won to 1.4371 trillion won, a reduction of 19.7%."
* This article has been translated by AI.
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