[Featured Stock] Hyundai Rotem Rises on Order Momentum and Strong Earnings Expectations... Hits New High

Hyundai Rotem is showing strength amid expectations of order momentum and strong earnings. It recorded a 52-week high during the session.

As of 9:22 a.m. on the 28th, Hyundai Rotem is trading at 54,400 KRW, up 900 KRW (1.68%) from the previous day. During the session, it rose to 55,800 KRW, setting a new 52-week high.

This is interpreted as being influenced by expectations of order momentum in the fourth quarter of this year and strong third-quarter earnings. On the same day, KB Securities forecasted that Hyundai Rotem's new orders in the fourth quarter could exceed 10 trillion KRW. Jeong Dong-ik, a researcher at KB Securities, said, "Expectations are growing for the second contract of the K2 tank with Poland," adding, "Since the second contract includes various additional options, it is expected to significantly exceed the first contract amount of 4.5 trillion KRW. Considering the fourth mass production for the Korean military (150 units, about 2 trillion KRW) and the possibility of contracts with Romania (300?500 units), new orders in the fourth quarter could exceed 10 trillion KRW."

Earnings are also expected to continue to improve. Researcher Jeong explained, "Hyundai Rotem's third-quarter earnings recorded sales of 1.1154 trillion KRW and operating profit of 116.4 billion KRW, significantly surpassing the consensus estimates of 1.0738 trillion KRW in sales and 104.6 billion KRW in operating profit. This is because the sales of the K2 tanks for Poland are recognized based on progress rate, and from the third quarter, the sales recognition for 96 units to be delivered next year has also begun in earnest." KB Securities raised Hyundai Rotem's target price by 18.2%, from the previous 55,000 KRW to 65,000 KRW, reflecting upward revisions in earnings estimates.