[Click eStock] "Hyundai Rotem, Potential Export of K2 to Norway... Target Price Up"

[Asia Economy Reporter Son Sunhee] NH Investment & Securities raised the target price of Hyundai Rotem from 32,000 KRW to 35,000 KRW on the 31st.

Hyundai Rotem's operating profit in the fourth quarter of last year was 61 billion KRW, exceeding the market forecast of 54 billion KRW. It is estimated that the defense solution performance from the export of the K2 tank to Poland was better than expected. Operating profit this year is also expected to increase by about 30% compared to the previous year.

Additionally, market interest is focused as the possibility of K2 Electronics exporting to Norway has been raised. According to a recent media report, the military authorities are reportedly reviewing the introduction of a weapons system developed by Norway's Kongsberg, which is known to have been requested by Norway as an offset condition related to the export of the K2 tank.

Lee Jaegwang, a researcher at NH Investment & Securities, explained, "If the military decides to adopt (the Norwegian weapons system), it means that the export of the K2 tank to Norway will become more advantageous," adding, "It is known that Norway's next tank project applies a 100% offset trade ratio."

Norway has initiated its next tank project to respond to the threat from the Russian military, with Germany's KMW Leopard 2A7V and Hyundai Rotem's K2 Black Panther competing. Although the exact procurement quantity and budget have not been finalized, NH Investment & Securities stated that about 13 billion NOK (approximately 1.6 trillion KRW) is expected to be invested to procure 70 to 100 units. Furthermore, Turkey's Altay tank, developed based on the K2 tank, has entered mass production, and related parts exports are also expected to be signed soon.