[Edaily Reporter Kwon Oh Seok ] Hana Securities announced on the 4th that it is maintaining its “Buy” rating on POONGSAN CORPORATION(103140)but lowering its target price from 110,000 won to 93,000 won.

Park Seong-bong, an analyst at Hana Securities, stated, “This year, POONGSAN CORPORATION is expected to struggle to meet the defense sales guidance it set at the beginning of the year, due to factors such as the war in the Middle East, accidents at client companies, and delays in government acceptance tests.” However, he added, “Next year, these issues are expected to be resolved, paving the way for significant growth in defense sales.”
He continued, “With the price of electrolytic copper expected to remain strong in the long term, we believe the current stock price—trading at a price-to-book ratio (PBR) of 0.6x—is undervalued, given this year’s projected return on equity (ROE) of 10.2%.”
Previously, third-quarter consolidated revenue and operating profit stood at 1.7 trillion won (+39.5% year-over-year) and 108.8 billion won (+155.5%), respectively, with operating profit in line with the market consensus of 95.5 billion won. The company provided a fourth-quarter standalone pre-tax profit guidance of 20 billion won, citing the following key assumptions: △a won-dollar exchange rate of 13,300 won
, an electric copper price of $14,400 per metric ton, and defense sales of 499.2 billion won.
Analyst Park stated, “POONGSAN CORPORATION cited a 40 billion won metal loss in copper due to the decline in the won-dollar exchange rate, a drop in profitability resulting from a deterioration in the defense product mix, and year-end operating expenses as the primary factors behind the significant profit decline,” adding He explained, “While uncertainty regarding U.S. tariffs on electrolytic copper persists, regional supply-demand imbalances caused by inventory buildup in the U.S. continue to drive price volatility.”
He further noted, “While concerns about short-term strikes have eased following the resolution of labor-management negotiations at major Chilean mines, continued weak mine supply due to declining ore grades and production disruptions is expected to support the downside of copper prices,” and "Consequently, considering that the average copper price for the fourth quarter is projected to be $14,700 per metric ton (+32.5%), consolidated operating profit for the fourth quarter is expected to reach 62 billion won (-32.2%)," he added.