[Click eStock] "Pungsan, Defense Industry Boom Drives Copper Price Up... Target Price Up 29%"

NH Investment & Securities on the 19th raised the target price of Poongsan to 71,000 KRW, an increase of 29%. In addition to the improvement in the defense sector's performance, it was expected that the non-ferrous metal business segment's performance would also improve due to the rise in copper prices.

Lee Jae-kwang, an analyst at NH Investment & Securities, stated in a report on the same day, "The copper price applied to the selling price of non-ferrous metal products (1-month lag) averaged $8,464 per ton in the first quarter, up 3.4% from the previous quarter. If the current price of $9,500 per ton is maintained, the average price in the second quarter will be $9,097 per ton, a 7.5% increase compared to the first quarter."

The analyst explained the rise in copper prices, saying, "Due to the impact of high interest rates, new mine investments have been delayed, existing mines are aging, and the Panama mine has been closed, leading to a slowdown in the increase of copper concentrate supply, causing smelting fees to plummet since the end of last year." He added, "As smelters with deteriorating profitability continue to reduce production, copper prices are rising."

He also noted, "With the rise in global security threats, a worldwide shortage of artillery shells is ongoing," and forecasted, "Poongsan will continue to expand exports in addition to solid domestic demand." Furthermore, he said, "There are plans to double the production capacity of 155mm shells this year," expecting "annual sales to increase by 250 billion KRW." He then presented this year's defense sales guidance at 1.1 trillion KRW, a 13% increase compared to the previous year.