[Click eStock] Hanwha Aerospace Strengthens Capabilities through Acquisition of Setrec Eye Shares

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities announced on the 2nd that it has raised its earnings estimates for Hanwha Aerospace for the first quarter and the full year of this year, maintaining a 'Buy' investment rating and raising the target price to 45,000 KRW.

Ji-san Kim, a researcher at Kiwoom Securities, stated, "Hanwha Aerospace's fourth-quarter earnings exceeded market expectations, and the structural improvement effects of Techwin and Precision Machinery were remarkable." He added, "The aircraft industry has entered a gradual recovery phase, and the civilian sectors such as Techwin, Precision Machinery, and Power Systems are expected to lead earnings improvements, so we are raising the earnings estimates for the first quarter and the full year." He further explained, "With the acquisition of shares in Satrec Initiative, the Aerospace affiliates now possess capabilities across the entire value chain of the satellite industry, and the new satellite business performance will enhance the valuation."

Operating profit for this year is expected to increase by 11% to 271.6 billion KRW, and first-quarter operating profit is projected at 25.9 billion KRW (QoQ -66%, YoY 704%), both exceeding previous estimates.

Meanwhile, attention should be paid to the active moves and potential growth prospects in the satellite business. Through the acquisition of shares in Satrec Initiative, Satrec Initiative and Hanwha Systems now hold capabilities in satellite bus, payload, and ground systems, while Hanwha Aerospace and Hanwha Systems possess launch vehicle capabilities. Synergy effects among affiliates are expected along with advanced domestic technology.

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