[Click e-Stock] "M&C Solution Expected to Benefit from Hyundai Rotem-Poland Second K2 Export Contract"

GL Research analyzed on July 17 that M&C Solution is expected to benefit from Hyundai Rotem's conclusion of the second K2 export contract with Poland. The firm did not provide an investment opinion or target price.

Park Changyoon, an analyst at GL Research, stated, "Hyundai Rotem, a key client of M&C Solution, has finalized its second K2 tank export contract with Poland. M&C Solution supplies drive and hydraulic system components for the K2 tank, and since the supply price is linked to the tank's cost, the higher specifications of locally customized tanks will directly lead to improved profitability for the company."

He further emphasized, "Even before the signing of the second contract, some of the total component volume had already been supplied in advance. With the confirmation of this contract, the company now has a foundation for rapid reflection of these results in future earnings."

He also expects a positive impact from the test equipment supply contracts signed in May this year for Egypt and Poland. He said, "This contract goes beyond a simple equipment supply agreement, as it also includes revenue from technical guidance that the Polish military will use for assembly and operation. As overseas sales increase, additional revenue is also expected in areas such as technical guidance, maintenance, training, and MRO (maintenance, repair, operation) services."

He added, "This suggests that M&C Solution is evolving beyond a simple equipment supplier to become a high value-added defense components company."

GL Research forecasts that M&C Solution will achieve sales of over 400 billion KRW and operating profit of over 60 billion KRW this year. He assessed, "Due to the recent expansion of global geopolitical risks and the European Union's policy of increasing defense budgets, expectations for the company's performance are rising, along with the outlook for expanded K-defense exports."