[Edaily Reporter Kwon Oh Seok ] HANWHA INVESTMENT & SECURITIES announced on the 21st that it is maintaining its “Buy” rating on POONGSAN CORPORATION(103140)but lowering its target price from the previous 147,000 won to 103,000 won.

Kwon Ji-woo, an analyst at HANWHA INVESTMENT & SECURITIES, stated, “The current stock price is trading at a discount of more than 70% compared to domestic defense industry peers, and confirmation of a recovery in defense earnings must precede any narrowing of this discount.” He added, “The key checkpoint for the future stock price is expected to be the materialization of additional defense orders in the second half of the year.”
The firm projected that second-quarter consolidated revenue would reach 1.6359 trillion won (+26.4% year-over-year), while operating profit would be 87.2 billion won (-6.8%), in line with the consensus estimate (operating profit of 81.9 billion won). He explained, “This is the result of Shin Dong’s metal gains offsetting the fact that defense revenue fell short of guidance,” adding, “Revenue in the Shin Dong division is expected to recover to 962.1 billion won (+44.2%), with sales volume reaching 48,000 metric tons.”
In contrast, defense sector revenue is projected to be 195 billion won (-43.5%), falling 74.8 billion won short of guidance (269.8 billion won). Analyst Kwon analyzed, “Domestic sales were impacted by delays in acceptance testing and supply contract schedules, while exports faced shipment delays due to the political situation in the Middle East. The sector’s operating margin is expected to improve to around 10% compared to the first quarter (4.5%).”
He added, “This is due to an increase in the export share resulting from domestic supply disruptions and the partial reflection of U.S. tariff refunds,” noting, “Since the cancellations are merely deferred, the order volume itself remains valid, but the timing of recovery has not yet been confirmed.”
He continued, “Defense sales for the first half totaled 351.7 billion won, representing only 25.6% of the company’s annual target (1.372 trillion won). To meet the plan, an average of 510.2 billion won per quarter is required, which exceeds the level of the fourth quarter of last year (410.9 billion won), the highest quarterly figure on record,” they noted, adding, “Annual defense sales are estimated to fall short of the plan at 1.2957 trillion won. The downward revision of the target price reflects the downward revision of 2026 earnings estimates and the decline in stock prices across the defense sector.”