In-Depth Analysis of Hyundai Rotem's Outlook: "A Brief Pause for Breath, Then Racing Ahead Again"
2026 earnings trend
This year's earnings are expected to follow a clear ‘stronger second half’ pattern.
- Why there is a brief slowdown: From the fourth quarter of last year through the first half of this year is a transition period, as volumes under the first Polish contract wind down and production of volumes under the second contract is being prepared. In this process, initial costs (such as contingency reserves) arise, which may temporarily lower margins (profit rates).
- Second-half rebound: However, toward the second half, the share of highly profitable 'defense exports' increases again. In particular, as the initial cost burden is not as large as feared, export margins will comfortably stay above 35% and lift earnings.
Promising 'export jackpot' candidates (export pipeline)
Beyond the Polish volumes already secured, countries where new contracts are expected to be signed this year are lining up. The report assesses this pipeline as “still strong”.
- 🇵🇪 Peru (most likely): A main contract is expected to be signed within this year for 54 K2 tanks and 141 wheeled armored vehicles.
- 🇮🇶 Iraq: The long-delayed formation of the cabinet has been completed. Now that the political situation has been settled, discussions on K2 tank exports appear set to gain rapid momentum.
- 🇷🇴 Romania: A tender notice is expected within this year, and Hyundai Rotem is considered a leading candidate.
- 🇵🇱 Poland (additional): Beyond the contracts already under way, discussions on a third executive contract (EC3) remain, securing long-term business.
Production capacity: "No worries about volume"
Even if export orders pour in, it's no use if you can't produce them, right?
According to the report, regardless of the Polish delivery schedule, Hyundai Rotem has the capacity to produce more than 80 K2 tanks for export per year. In other words, it is ready to turn them out at any time as soon as orders come in.
"Now may be the opportunity"
Share price attractiveness: Looking across the entire defense industry, Hyundai Rotem's share price burden (valuation) relative to what it earns is comparatively lighter.
Timing: Although the exact timing of contracts cannot be known, 2026 will be a year when large-scale export momentum is back in the spotlight. The analysis is that the temporary pause for breath in the first half could actually be a buying opportunity.
One-line summary: "Even if earnings look a bit sluggish in the first half, there is no need to be disappointed. Major new contracts with Peru, Iraq and others are waiting, and profitability is set to clearly improve from the second half, so it is a time worth watching with a long-term view."