[Alpha Biz= Paul Lee] Seoul, November 3, 2025 — Korea Investment & Securities (KIS) maintained its “Buy” rating on Poongsan Corp., saying the company’s recent earnings miss represents a recoverable, short-term setback rather than a deterioration in fundamentals. However, the brokerage lowered its target price from ₩204,000 to ₩176,000 to reflect continued near-term weakness. Poongsan shares last closed at ₩110,000.
Poongsan reported third-quarter consolidated operating profit of ₩42.6 billion, down 42% year-on-year and 46.6% below market expectations of ₩80 billion.
Analyst Choi Moon-sun attributed the earnings shock primarily to losses at PMX Industries, Poongsan’s U.S. subsidiary, which had been expected to benefit from U.S. tariff policies but instead posted an operating loss. Contributing factors included volatile copper prices, higher production costs, weak shipments, and delayed defense sales, though most of these were already reflected in forecasts.
Copper price swings played a major role. Prices surged in July on expectations of new U.S. tariffs, driving up PMX’s raw material costs in August. When copper was later excluded from the tariff list, prices plunged, leading to inventory losses of about ₩8.5 billion.
Moreover, a 50% tariff on copper-processed products implemented in August pushed product prices even higher, reducing customer orders and narrowing PMX’s spread margins.
Choi noted that copper demand fundamentals remain solid:
“Customers have largely depleted inventories, and with copper prices rising on supply tightness, demand recovery is inevitable,” he said. “As PMX’s shipments normalize and short-term copper volatility fades, we expect the company to benefit from U.S. tariff policy as initially projected.”
He added, “The weak results are already priced in, and Poongsan’s investment thesis remains fully intact. Defense sales have merely been deferred, and copper prices are expected to trend upward through the first half of next year due to seasonal demand.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
