Corporate Logo(source: hyundai-rotem.co.kr)
Korea Investment & Securities raised its target price for Hyundai Rotem(064350) from 92,000 won to 118,000 won on March 11, citing expected benefits from increased defense spending by European countries aimed at strengthening their national defense capabilities.
As the United States strengthens its "America First" stance, European nations have begun increasing their defense budgets to bolster their own defense capabilities. This shift is expected to reduce competition in non-European regions while driving demand in Europe, expanding the market, according to the report.
Korea Investment & Securities pointed out that Hyundai Rotem benefits from both of these trends. With the domestic production of the K2 tank transmission now complete, the company is expected to begin full-scale marketing in the Middle East this year.
The market for tank exports to the Middle East, particularly to Saudi Arabia and the United Arab Emirates(UAE), is estimated to exceed 18 trillion won. With reduced competition, Hyundai Rotem now has an opportunity to enter this market.
Furthermore, the report emphasized Hyundai Rotem’s ability to directly respond to the growing demand for weapons systems in Europe, particularly since the company has established a local production base in Poland.
Hyundai Rotem is also preparing for a second contract with Poland for the K2 tank. The contract is estimated to include 180 units, with some of the tanks set to be locally produced in collaboration with Poland’s state-owned defense company, PGZ. Countries like Slovakia are showing interest in the K2 tanks to be produced in Poland, and the report suggests that this will lead to an expansion of exports through the Polish production base.
Jang Nam-hyun, an analyst at Korea Investment & Securities, stated, “Hyundai Rotem has shown strong profitability and possesses an export pipeline spanning the Middle East and Europe. The forward price-to-earnings ratio(P/E ratio) for this year is 17.2 times, which is lower than the European average of 26.8 times, highlighting the company’s valuation attractiveness."
*[KOSPI]Hyundai Rotem(064350) is a manufacturer of railway vehicles and defense products, conducting rail solutions, defense solutions, and eco-plant businesses. Market capitalization is 10 trillion 73.8 billion won(as of March 10, 2025, closing price).
Corporate Logo(source: hyundai-rotem.co.kr)
Korea Investment & Securities raised its target price for Hyundai Rotem(064350) from 92,000 won to 118,000 won on March 11, citing expected benefits from increased defense spending by European countries aimed at strengthening their national defense capabilities.
As the United States strengthens its "America First" stance, European nations have begun increasing their defense budgets to bolster their own defense capabilities. This shift is expected to reduce competition in non-European regions while driving demand in Europe, expanding the market, according to the report.
Korea Investment & Securities pointed out that Hyundai Rotem benefits from both of these trends. With the domestic production of the K2 tank transmission now complete, the company is expected to begin full-scale marketing in the Middle East this year.
The market for tank exports to the Middle East, particularly to Saudi Arabia and the United Arab Emirates(UAE), is estimated to exceed 18 trillion won. With reduced competition, Hyundai Rotem now has an opportunity to enter this market.
Furthermore, the report emphasized Hyundai Rotem’s ability to directly respond to the growing demand for weapons systems in Europe, particularly since the company has established a local production base in Poland.
Hyundai Rotem is also preparing for a second contract with Poland for the K2 tank. The contract is estimated to include 180 units, with some of the tanks set to be locally produced in collaboration with Poland’s state-owned defense company, PGZ. Countries like Slovakia are showing interest in the K2 tanks to be produced in Poland, and the report suggests that this will lead to an expansion of exports through the Polish production base.
Jang Nam-hyun, an analyst at Korea Investment & Securities, stated, “Hyundai Rotem has shown strong profitability and possesses an export pipeline spanning the Middle East and Europe. The forward price-to-earnings ratio(P/E ratio) for this year is 17.2 times, which is lower than the European average of 26.8 times, highlighting the company’s valuation attractiveness."
*[KOSPI]Hyundai Rotem(064350) is a manufacturer of railway vehicles and defense products, conducting rail solutions, defense solutions, and eco-plant businesses. Market capitalization is 10 trillion 73.8 billion won(as of March 10, 2025, closing price).