Pungsan, a metal and defense manufacturing company, is experiencing a decline in its stock price amid concerns that its third-quarter earnings will fall short of market expectations.
As of 11:10 a.m. on October 7, Pungsan's shares were trading at 69,200 won, down 8,700 won (11.17%) from the previous trading day, according to the Korea Exchange.
The drop in Pungsan's stock is attributed to growing worries about short-term performance. KB Securities forecasts that the company's operating profit for the third quarter will be 84.7 billion won, which is 25% below the consensus estimate. Consequently, the firm has lowered its target price from 140,000 won to 112,000 won.
Despite rising copper prices, the outlook remains bleak. Choi Yong-hyun, a researcher at KB Securities, stated, "In the copper segment, the impact of rising copper prices is limited due to the strengthening of the won, resulting in a minimal metal gain effect. We estimate operating profit will decline by 59.1% year-on-year to 37 billion won."
The defense sector's performance is also expected to fall short of expectations. Choi noted, "Similar to the second quarter, domestic acceptance tests are delayed, and export shipments are hindered by ongoing conflicts in the Middle East, leading to an estimated operating profit of 47.7 billion won, a 28.1% increase year-on-year."
* This article has been translated by AI.
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