[Click eStock] "Pungsan, Stock Price Doubled but Still Undervalued"

NH Investment & Securities analyzed on the 2nd that the stock price of Pungsan, which has doubled in the past year, is still in an 'undervalued state.'

Lee Jae-kwang, an analyst at NH Investment & Securities, forecasted in a report on the same day that "Pungsan will achieve record-high performance in the second quarter of this year." He analyzed that copper prices surged 13% compared to the first quarter, and the sales volume of non-ferrous metals also increased by 7.5%, which will further improve the performance of the non-ferrous metal business. He also expected that the defense sector's performance will improve due to increased demand for shells.

The analyst stated, "Although copper prices turned bearish after May, the supply and demand of refined copper remain tight," and predicted, "The decline in copper prices will not continue to widen significantly in the long term."

He evaluated, "Although Pungsan's stock price rose 67% this year alone, it is still undervalued in terms of corporate valuation," adding, "Pungsan's 12-month forward price-to-earnings ratio (PER) is around 8 times, showing a large gap compared to the average PER of 20 times for five domestic defense companies."

He added, "The reason for the undervaluation is the large proportion of the non-ferrous metal business, which has high earnings volatility, but if the non-ferrous metal and defense businesses are spun off separately, the combined corporate value of each business will increase."