Hyundai Rotem's shares surged by 8% in early trading, driven by expectations of increased production capacity and overseas defense contracts in the second half of the year.
According to the Korea Exchange, as of 10:07 a.m., Hyundai Rotem's stock was trading at 216,000 won, up 7.73% (15,500 won) from the previous trading day.
Analysts noted that following a recent inspection of Hyundai Rotem's Changwon plant, there is growing optimism about the defense sector's growth potential and additional contract opportunities.
Lee Jae-gwang, a researcher at LS Securities, stated after visiting the Changwon plant on May 29, "I confirmed the high production capacity and excellent performance of the K2 tank." Hyundai Rotem has converted part of its steel plant into a defense production line, increasing the K2 tank's production capacity from 12 to 15 units per month, a roughly 25% increase.
Lee also mentioned that discussions for K2 tank imports are ongoing not only with Poland, Romania, and Peru but also with countries in Northern Europe and Asia.
Yang Seung-yoon, a researcher at Eugene Investment & Securities, also visited the Changwon plant on the same day and reported that both defense and railway production lines are operating at full capacity.
Yang remarked, "If contracts are confirmed, concerns about performance growth will be minimal," adding that the expansion of production capacity and increased automation are enhancing global competitiveness. He projected that as overseas defense contracts become more visible in the second half of the year, Hyundai Rotem is likely to emerge from its undervalued phase.
* This article has been translated by AI.
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