[Click e-Stock] "Hyundai Rotem Maintains Solid Growth... Target Price Raised"

On May 19, Kiwoom Securities raised its target price for Hyundai Rotem to 148,000 won, citing expectations for continued robust earnings growth this year.

In the first quarter of this year, Hyundai Rotem reported sales of 1.1167 trillion won and operating profit of 202.9 billion won. These figures represent increases of 57.3% and 354%, respectively, compared to the same period last year. In the Defense Solution division, the share of export sales reached 71%, driving improved profitability.

The Rail Solution division continues its solid growth trajectory, backed by an order backlog worth approximately 16 trillion won. The Ecoplant division saw a temporary decline in sales due to the completion of projects for affiliates.

Lee Hangyeol, a researcher at Kiwoom Securities, stated, "The Defense Solution division's strong production performance is sustaining high growth, leading to a steady trend of robust earnings. Although 14 K2 tanks were delivered ahead of schedule in the fourth quarter of last year, resulting in a reduction of 2025 deliveries from the original 96 units to 82 units, we expect any sales gap to be minimized if a second contract with Poland is signed and production schedules are adjusted accordingly."

Hyundai Rotem is expected to continue its earnings growth this year, driven by export-related capacity expansions.

Lee added, "Hyundai Rotem is currently negotiating contracts for K2 tanks and armored vehicles in various regions beyond Poland. The company is pursuing overseas projects in several countries and regions, including Romania's next-generation tank program, as well as Slovakia, Peru, the Middle East, and Asia. Therefore, if additional overseas orders follow the signing of the second contract with Poland, further expansion of production lines will likely be necessary."

Accordingly, the buy investment rating is maintained, and the target price has been raised to 148,000 won.