[Special Stock] Daesung Hightech Gains Direct Benefit from Israel War... Operating Profit Up 9 Times 'Rerating'

Daesung Hitech's stock price has been on the rise for consecutive days. Since the Palestinian armed group Hamas launched a surprise attack on Israel, Israel's retaliatory strikes have continued. Securities firms' analyses suggesting that Daesung Hitech, which supplies parts to Israel's largest defense contractor, will benefit appear to be influencing the stock price.

As of 9:12 AM on the 12th, Daesung Hitech was trading at 10,520 KRW, up 1,050 KRW (11.09%) compared to the previous trading day.

Hana Securities analyzed that orders to Israel's largest defense contractor for Daesung Hitech are expected to increase.

Researcher Jo Jeong-hyun of Hana Securities explained, "Direct benefits to Daesung Hitech are expected due to the Israel-Palestine war declared on the 7th. Last year, Daesung Hitech was recognized for its ultra-precision parts processing technology and quality for the defense industry and succeeded in mass-producing parts for Israel's largest defense company."

He added, "Daesung Hitech is currently supplying more than 20 parts, including missile and guided missile components, to a total of three global defense companies, including Israel's largest defense contractor. The performance of defense precision parts increased from 3 billion KRW in sales last year to 5 billion KRW in the first half of this year."

Researcher Jo said, "Considering the expansion of orders due to the Israel-Palestine war next year, we expect more significant growth from the previously estimated defense parts sales of about 12 billion KRW. The prolonged Israel-Palestine war and the spread of regional conflicts in the Middle East make it inevitable for Israel's major defense companies to expand their defense industry investments."

He forecasted, "Since Daesung Hitech counts Israel's largest defense contractor as a client, a trickle-down effect is expected. Next year, sales of 136.5 billion KRW and operating profit of 16.7 billion KRW are anticipated."

Considering this year's expected performance of 89.7 billion KRW in sales and 1.9 billion KRW in operating profit, a significant improvement in next year's performance is expected. Researcher Jo judged that it is a time for re-rating.