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Talks to end war in Ukraine boost prospects for Korean equipment makers
An HD Hyundai official introduces the company during the opening ceremony of HD Hyundai XiteSolution's Ukraine repsentative office in Kyiv, Jan. 28 (local time). Screenshot from Yaroslav Demchenkov's Linkedin
By Park Jae-hyuk
Investors bet on potential participants in postwar reconstruction project
U.S. President Donald Trump's announcement of his conversations with the leaders of Russia and Ukraine on beginning peace talks has led investors to pin high hopes on Korean companies' imminent participation in postwar reconstruction projects, whose economic value is estimated to reach $900 billion.
Manufacturers of construction equipment and farming machines especially enjoyed the positive outlook, thanks to their constant efforts to boost ties with the Ukrainian government during wartime.
Trump said Wednesday (local time) that he had separate phone calls that day with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, ordering top U.S. officials to begin truce negotiations.
Predicting a ceasefire in Ukraine in the "not-too-distant future," Trump also said that his meeting with Putin would "probably" take place soon in Saudi Arabia.
"I think we're on the way to getting peace. I think President Putin wants peace, President Zelenskyy wants peace, and I want peace. I just want to see people stop getting killed," he told reporters at the White House.
Although Trump pushed back his campaign pledge to end the Ukraine war in "24 hours" to several months, he has long said that he would quickly bring peace to the country.
Given that his predecessor, Joe Biden, had no direct contact with Putin after Russia's invasion of Ukraine in February 2022, the latest conversations between the three countries' leaders are seen as the greatest signs of progress in steps to end the three years of war.
Stock prices of probable Korean participants in the postwar reconstruction project, therefore, soared rapidly during Thursday's trading session.
Daedong Gear, a components manufacturing unit of Daedong, a major Korean agricultural equipment maker, temporarily saw its stock price hit the daily ceiling of 26,350 won ($18) on Thursday morning, although it eventually closed at 24,850 won, up 22.41 percent from the previous session.
Daedong and its other affiliates also enjoyed sharp rises in stock prices that day.
Based on its close relationship with Ukrainian politicians, Daedong has already shipped tractors to the European country. The farming machine producer signed an agreement with a Ukrainian importer in November to supply 30 billion won worth of tractors over the next three years.
"We will do our best to keep contributing to Ukraine's agriculture and to play a major role in the long-term development of the country's farming industry," Daedong Vice President Lee Jong-sun said last month.
Daedong Vice President Lee Jong-sun, right, and Ukrainian Sen. Oleksandr Denysenko hold the Ukrainian national flag next to the Korean firm's tractor at its factory in Daegu, Jan. 15. Courtesy of Daedong
HD Hyundai's construction equipment units also experienced over 10 percent increases in their stock prices on Thursday morning.
HD Hyundai Infracore closed at 9,270 won, up 14.16 percent from the previous day, while HD Hyundai Construction Equipment closed at 82,800 won, a 9.52 percent rise from a day earlier.
HD Hyundai XiteSolution, an HD Hyundai intermediate holding firm that supervises the two heavy machine makers, has continued investing in Ukraine during wartime, maintaining the largest share in the European country's construction equipment market.
In 2023, HD Hyundai Construction Equipment sent five crawler excavators to Ukraine's southern city of Mykolaiv for urgent infrastructure restoration. The company plans to transfer an additional 30 units of equipment this year.
Last month, HD Hyundai XiteSolution opened its representative office in the Ukrainian capital of Kyiv.
"This is fantastic news for Ukraine and its construction and road equipment market," former Ukrainian Deputy Energy Minister Yaroslav Demchenkov wrote on social media, posting photos of the office's opening ceremony.
"Machinery is already in high demand, and as soon as the war ends and large-scale sustainable reconstruction begins, the need for advanced equipment will only grow," he added.
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