Are these really tractor companies? Daedong, TYM shares surge on new bets

Daedong and TYM, South Korea's two largest agricultural machinery companies, have seen their share prices surge even as broader market volatility has increased. Expectations surrounding Daedong's agricultural robot project and TYM's improved earnings and buyback announcement are credited with driving the gains.

According to Korea Exchange data, Daedong's share price climbed as high as 8,090 won intraday on Nov. 4 — a 23.7% jump from its closing price of 6,540 won the previous day. The stock later gave back some of those gains, ending Tuesday's session at 6,830 won.

The sharp rally was triggered by a forum held at the National Assembly on Nov. 3 titled "Forum on Building a Saemangeum Physical AI Robot Farm Factory." Daedong discussed plans to develop and commercialize agricultural robots with North Jeolla Province, Gimje and Hyundai Motor Group, among others.

The project envisions investing about 300 billion won ($224 million) in the Saemangeum area to establish a 21-hectare hub for physical AI in agriculture. Daedong plans to participate in the development, demonstration and commercialization of agricultural robots.

Daedong's core farm-equipment business is also showing signs of improvement. Revenue for the first half of this year on a consolidated basis reached 844.8 billion won, up 5.4% from the same period last year, while operating profit came in at 47.3 billion won. Second-quarter operating profit was particularly strong at 41.2 billion won, a 64.3% increase from a year earlier.

TYM's shares have also advanced sharply. The stock rose 20.2% from 6,190 won on Nov. 4 to 7,440 won on Wednesday, with a single-day gain of 14.46% on Wednesday alone.

TYM announced Wednesday that it would buy back approximately 10 billion won worth of its own shares. The repurchase covers 1,538,461 shares, or about 3.7% of total shares outstanding, and runs from Thursday through Feb. 11 next year. The company said the buyback was aimed at enhancing shareholder value.

Earnings have also improved. TYM's third-quarter consolidated revenue rose 16.0% year-on-year to 260.1 billion won, while operating profit rose 124.7% to 35.8 billion won. Cumulative operating profit through the first three quarters reached 98.4 billion won, up 78.0%.

TYM canceled treasury shares equivalent to about 8.1% of its total shares outstanding last year. Whether the newly acquired shares will also be retired has not yet been decided. Under the revised Commercial Act, companies are in principle required to cancel newly acquired treasury shares within one year; retaining them beyond that requires shareholder approval at a general meeting.