[Market Focus] Pungsan Hits Record High on Analysis That It Remains Undervalued

Pungsan is showing strong performance in early trading.

As of 9:05 a.m. on June 13, Pungsan was trading at 99,800 won, up 13.93% (12,200 won) from the previous day. At one point during the session, the price soared to 100,000 won, setting a new 52-week high. This marks a five-day consecutive rally.

On this day, sentiment in the securities market was boosted by assessments that Pungsan remains an undervalued defense company.

Lee Jaekwang of NH Investment & Securities stated, "Although the share price has risen 33% over the past three trading days, we still consider it undervalued," raising the target price for Pungsan from 92,000 won to 115,000 won.

The analyst explained, "Over the past three days, the price of copper, the company's core raw material, has declined by only 0.5%, so the recent surge in the share price is seen as a re-rating of the undervalued defense segment. The 12-month forward average PER (price-to-earnings ratio) of major domestic defense stocks is about 30 times, while Pungsan's is around 9 to 10 times, making it still the cheapest defense stock in the world."

He added, "Pungsan is the only ammunition manufacturer in Korea and, due to a surge in global ammunition demand, recorded its highest-ever earnings last year. Growth is expected to continue this year as well. Operating profit for the second quarter of this year is projected at 103 billion won, which will be a decrease year-on-year due to the base effect (the effect of a higher comparison base), but is expected to increase compared to the previous quarter thanks to rising defense exports."