사진 확대

Hana Securities maintained its target price at 283,000 won on the 29th, saying Hyundai Rotem is subject to the lowest valuation among the five defense companies in Korea and its second-quarter earnings are expected to meet market consensus.

Hana Securities predicted that the performance growth of the defense solution sector will continue, focusing on the recognition of mass production sales of the K2 2nd contract to Poland.

Hyundai Rotem's stock price has remained in the box range of KRW 16.5 million to KRW 28.2 million since the second half of 2025. This is the range equivalent to 18 to 28 times based on the 12-month forward price-to-earnings ratio (Fwd PER). Currently, the stock price has fallen back to the lower Fwd PER level of 18 times.

Hana Securities said, "It is subject to the lowest valuation among the five domestic defense companies," adding, "Even considering the recent market conditions in which stock prices have continued to rise in certain sectors, the remarkable undervaluation within the defense sector can eventually be interpreted as a concern about performance."

"The balance of orders in the defense solution sector is about 10 trillion won, which is not too difficult for earnings growth from a mid- to long-term perspective," he said. "However, considering the delivery schedule, short-term performance concerns will be resolved only when visible defense exports are secured by the second quarter of 2027 at the latest."

Hana Securities forecasted a 19.3 percent year-on-year increase to 1.7 trillion won in second-quarter sales. The order backlog in the rail solution and eco-plant sectors is 18.5 trillion won and 0.8 trillion won, respectively, and sales recognition rates are assumed to be 2.9% and 19.0%.

Sales of Defense Solutions, a core business unit, are expected to increase 31.9% year-on-year to 1.0 trillion won. This is due to the growing awareness of sales of the second mass production of K2 tanks bound for Poland. Operating profit is expected to rise 11.9% year-on-year and fall 1.1 percentage points to 288.2 billion won and operating profit ratio to 17.0%, respectively. It is estimated that the profitability of the second mass production project of the Polish K2 tank is improving gradually.

"In June, Romania signed a contract with Rheinmetall to supply combat vehicles, air defense systems, and ammunition worth 5.7 billion euros," said Chae Eun-sam, a researcher at Hana Securities. "This contract, which utilizes SAFE loans from the European Union, raises concerns that Rheinmetall may dominate the local production network in Romania and even flow the tram business in favor of German companies." "However, the direct impact is limited in that the projects and the tram project are being carried out separately," he said.