Hyundai Rotem (064350) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Hyundai Rotem runs three businesses together: a defense business that makes weapons such as the K2 tank, a rail business that makes rolling stock such as electric multiple units and high-speed trains, and an eco-plant business that builds steelmaking and hydrogen facilities. In 2025 it posted record results with revenue of ₩5.839 trillion (up 33.4% year on year) and operating profit of ₩1.0056 trillion (up 120.3%), as Poland K2 tank exports lifted results and the defense backlog grew nearly threefold in a year. What stands out lately is that defense revenue is carrying most of the profit as profitability improves sharply; conversely, margins in the rail and eco-plant divisions are still low, so if the defense delivery schedule wavers, overall earnings swings can grow.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Defense & Aerospace” (Shipbuilding, Machinery, Defense & Power Equipment), a type typically read first through forward P/E.
Defense and aerospace carry long order backlogs and multi-year program execution, which makes the direction of future results relatively visible. Since booked orders feed into earnings ahead, forward price-to-earnings (P/E on expected profit) is the first lens rather than trailing results.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Revenue rose 33.4% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 23.9% higher than a year earlier.
- ROE is 25.3% (controlling-interest basis). It is above the sector average.
- Operating margin is 16.8%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Hyundai Motor 33.77% (individual)
Controlling bloc incl. related parties 33.77%
With the controlling bloc holding 34%, the ownership structure is stable.
🔎 In-depth analysis Reading
Hyundai Rotem makes money from three broad businesses. The first is defense (defense solutions), making the K2 tank, wheeled armored vehicles and the like; with large Poland exports added, it now carries most of the company's profit. The second is rail solutions, supplying rolling stock such as electric multiple units, high-speed trains and trams at home and abroad. The third is eco-plant, building steelmaking facilities and hydrogen charging and production facilities. As of 2025, defense revenue grew to ₩3.2153 trillion, becoming the largest of the three divisions in both scale and profitability. Rail has large revenue but thin margins amid fierce overseas order competition, and eco-plant is shrinking in scale as existing large projects near completion.
The latest close is ₩144,200 and the market capitalization is ₩15.7 trillion. The price sits below its 20-day moving average (₩148,675) and below its 60-day moving average (₩181,585). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 44.8, a neutral level. The one-month change is -22.6%, the three-month change is -45.0%, and the position relative to the 52-week high is -46.4%. Relative strength versus the KOSPI is 6 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 5% of all stocks. Over the past three months it lagged the index by 27.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
This is a stock that must be viewed with valuation and profitability together. The P/E ratio (how many times one year's earnings the price represents) is 20.44x, and the P/B (how many times book net assets the price represents) is 4.89x. It may look far from low at a glance, but this P/E is on last year's confirmed earnings (trailing) and does not fully capture the current phase of rapidly rising defense profit. Profitability stands out among defense peers: ROE (how much is earned in a year on equity) is 25.0% and the operating margin is 17.2%, both high. On the balance sheet, the debt ratio (debt against equity) is not low at 203.9%, but this largely reflects the order-industry trait of recording large advance payments and project-related liabilities. Interest coverage (how many times operating profit covers interest) is 17.5x, a level that amply covers the interest burden. Net debt is negative (net cash), with cash holdings exceeding borrowings. EV/EBIT (debt-adjusted enterprise value divided by operating profit, a debt-adjusted counterpart to the P/E) is 20.7x, and EV/EBITDA (on a pre-depreciation earnings basis) is 19.5x. The FCF yield (actual cash generated relative to market cap, with higher indicating more attractive cash generation) is around 3.5%.
Growth is very fast. Revenue rose from ₩3.5874 trillion in 2023 to ₩5.839 trillion in 2025, up 33.4% year on year, and the pace of increase itself is accelerating. Operating profit jumped over the same period from the ₩210 billion range to ₩1.0056 trillion, entering the '₩1 trillion operating-profit club' (up 120.3% year on year). Net profit also grew sharply, reaching ₩769.9 billion in 2025. The first quarter of 2026 continued the increase, with revenue of ₩1.4575 trillion (+23.9%), operating profit of ₩224.2 billion (+10.5%) and net profit of ₩202.7 billion (+29.0%). The core of the profit growth is defense. The defense backlog surged 171.6%, from ₩3.8727 trillion at the end of 2024 to ₩10.5181 trillion at the end of 2025, and the total backlog of ₩29.7735 trillion secures roughly five years of work relative to revenue. Because the second Poland K2 tank contract volume begins to be reflected in revenue in earnest from 2026, even though the P/E on last year's confirmed earnings looks high, on this year's expected-earnings basis the valuation burden eases.
The recent flow is confirmed by disclosures. In defense, single sales and supply contract signings and amendments came out one after another, so the order expansion is turning into actual contracts. In January 2026, the second advance payment of roughly US$2.1 billion for the second Poland K2 tank contract flowed in, supporting cash flow. In late April it announced record Q1 2026 revenue and held an investor-relations event. On the other hand, in early May there was a disclosure of a lawsuit above a certain amount, and in May a clarification disclosure regarding rumors and media reports also came out, so matters requiring confirmation also exist. The dividend is ₩600 per share (a payout ratio of 8.5%), on the low side with weight placed on reinvestment for growth.
The core is the trajectory of defense profit. Poland K2 tank exports lifted the defense margin to around 27%, and a backlog of more than five years supports future revenue. If the defense delivery schedule proceeds as planned, this year's and next year's profit grow larger than last year's. Compared with defense peers, its profitability (25% ROE) is the highest while its price relative to earnings is on the lower side, so on an expected-earnings basis the undervaluation signal is clear. The cautions are equally clear, however. The rail division has large revenue but margins have thinned to the 0% range, and eco-plant is in a contraction phase, so dependence on defense is very high. Quarterly earnings swings can grow depending on individual risks such as the shift to local production in Poland, the timing of additional contracts, and lawsuits. It is a stock that is strong when defense delivery is smooth and weak when delivery delays or weakness in non-defense divisions coincide.
🔎 Valuation vs peers Undervalued
Compared on profitability and valuation with major domestic defense companies (Hanwha Aerospace, LIG Defense & Aerospace, Korea Aerospace Industries).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 38.68x | 5.46x | 17.56% |
| LIG Defense & Aerospace | 60.96x | 10.23x | 20.46% |
| Korea Aerospace Industries | 78.71x | 7.85x | 10.63% |
Its position relative to defense peers is clear. Hyundai Rotem's P/E of 23.8x is far lower than Hanwha Aerospace (34.1x), LIG (65.7x) and Korea Aerospace Industries (77.4x), yet its ROE and operating margin are the highest in this group. In other words, it earns the best while its price relative to earnings is the cheapest. That said, the P/E on last year's confirmed earnings has the limitation of not fully capturing the current phase of surging defense profit. Because the second Poland K2 tank volume is reflected in revenue in earnest this year, on an expected-earnings basis the valuation burden eases further. Taking this into account, it is judged to be in an undervalued zone where the discount to peers is excessive.
Price history Close · MA20 · MA60
The latest close is ₩144,200 and the market capitalization is ₩15.7 trillion. The price sits below its 20-day moving average (₩148,675) and below its 60-day moving average (₩181,585). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 44.8, a neutral level. The one-month change is -22.6%, the three-month change is -45.0%, and the position relative to the 52-week high is -46.4%. Relative strength versus the KOSPI is 6 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 5% of all stocks. Over the past three months it lagged the index by 27.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -27.01% / 6M -47.15% / 12M -62.45%
Key metrics Computed vs sector median
Valuation
The P/E of 20.44x is below the sector median (46.67x). The P/B is 4.89x.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.2x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 25.3%, above the sector average (11.0%). The operating margin is 16.8%. The debt ratio is 186.1%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.5B | $3.1B | $4.1B | +33.41% ↑ faster |
| Operating profit | $147.6M | $320.7M | $706.5M | +120.26% ↑ faster |
| Net profit | $113.1M | $285.8M | $540.9M | +89.23% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $2.0B | $2.2B | $2.5B | $3.1B | $4.1B |
| Operating profit | $56.4M | $103.6M | $147.6M | $320.7M | $706.5M |
| Net profit | $46.7M | $139.0M | $113.1M | $285.8M | $540.9M |
| Revenue CAGR | 4-yr avg 19.40% | ||||
Revenue rose 33.4% year over year (2023 ₩3.6 trillion → 2024 ₩4.4 trillion → 2025 ₩5.8 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit rose 120.3% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 19.4%. The two-year revenue CAGR is 27.6%. In the most recent quarter (Q1 2026), revenue was 23.9% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- ROE of 25.3% points to solid profitability.
- Revenue grew 33.4% year over year, a sign of growth.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-05-28UpdateSingle sales and supply contract signing (amendment) disclosure in the defense division. The flow of defense orders turning into actual contracts continues.Supports defense revenue and backlog over the medium term. The timing of reflection in results is determined by the delivery schedule. Source
- 2026-05-07UpdateDisclosure of a lawsuit filing/application (amendment) above a certain amount. An individual lawsuit matter requiring confirmation exists.An uncertainty factor over the short term. Possible cost and reputational impact depending on the outcome. Source
- 2026-04-29UpdateSingle sales and supply contract signing (amendment) disclosure in the defense division. A flow of expanding defense volume including K2 tanks.Strengthens medium-term defense revenue visibility. A factor for a higher share of high-margin defense. Source
- 2026-04-27EarningsQ1 2026 results: revenue of ₩1.4575 trillion (+23.9%), operating profit of ₩224.2 billion (+10.5%), net profit of ₩202.7 billion (+29.0%). The defense division drove results.Confirms continued growth over the short term. Profitability improved on a rising defense margin. Source
- 2026-05-15FilingQ1 2026 quarterly report and investor-relations (IR) event. The latest financials and backlog were disclosed.Neutral. Grounds for confirming the latest results and backlog. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-05-29Large-business-group status disclosure
- 2026-05-28Single supply/sales contract (amended)
- 2026-05-28Corporate governance report
- 2026-05-21Amended filing
- 2026-05-15PeriodicQuarterly report
- 2026-05-15Disclosure
- 2026-05-15Disclosure
- 2026-05-08Disclosure
- 2026-05-07Litigation disclosure (amended)
- 2026-04-29Single supply/sales contract (amended)
- 2026-04-27Single supply/sales contract (amended)
- 2026-04-27Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.