[Click eStock] “Pungsan, Steady Defense Sales Expected in 2025”

Yuanta Securities forecasted on the 14th that Poongsan will record solid sales in the defense sector in 2025 as well.

Hyunsoo Lee, a researcher at Yuanta Securities, stated in a report on the same day, "The defense sector was the main driver of sales and operating profit growth from 2023 to 2024," adding, "Pre-tax profit in the defense sector increased significantly from 78 billion KRW in 2020 to 217 billion KRW by the third quarter of 2024, and the profit margin rose from the low teens to the mid-20% range."

Lee explained, "Demand for large-caliber artillery in the European region remains solid, but as the Russia-Ukraine war has lasted nearly three years, short-term demand has been largely met, so the growth in defense exports is expected to slow somewhat," and added, "As the proportion of high-profit exports decreases and domestic sales increase, the profitability (OPM) of the defense sector may slightly decline."

Poongsan's copper and copper alloy division has a higher export ratio than domestic sales, so it is expected to benefit from the rise in the KRW/USD exchange rate.

Lee analyzed, "The higher exchange rate will have a positive effect on sales and operating profit," and "Additionally, an overall increase in copper and copper alloy sales volume is expected, so operating profit in this division is likely to be similar to or slightly improved compared to the previous year."