[Click eStock] "Hanwha Aerospace, Rising Expectations for Defense Export"

Strong Earnings Outlook Exceeding 2021 4Q Consensus
Robust Consumer Sector... Increased Expectations for Defense Export

[Asia Economy Reporter Minwoo Lee] Hanwha Aerospace is expected to post better-than-market-expected strong results for the fourth quarter of last year. It is analyzed that the company will continue to record its best performance since joining the Hanwha Group, driven by strong civilian sector performance.

On the 4th, Daishin Securities maintained its 'Buy' rating and target price of 65,000 KRW for Hanwha Aerospace based on this background. The closing price on the previous day was 49,600 KRW.

Daishin Securities anticipated that Hanwha Aerospace would finish the last quarter of the year on a high note. The fourth-quarter earnings were estimated at 952.5 billion KRW in sales and 88.9 billion KRW in operating profit, representing increases of 13% and 16%, respectively, compared to the same period last year. The results are expected to exceed market consensus by about 2% in sales and 22% in operating profit.

In the aircraft engine sector, civilian sales expansion continued while costs for the international joint development project (RSP) also surged. Domestic defense sales were in their seasonal peak period. Techwin benefited from the ongoing positive effects of China's CCTV ban in the U.S. Power Systems also saw increased sales and recovered profit margins due to a growing order backlog. Accordingly, the annual results for last year are expected to reach 6.394 trillion KRW in sales and 390.7 billion KRW in operating profit, surging 20% and 60% year-on-year, respectively.

Expectations for defense exports are also rising. On the 13th of last month, the company secured an order worth 931.9 billion KRW related to Australia's K-9 self-propelled howitzer. The selection of an armored vehicle supplier for Australia, worth 5 trillion KRW, is also pending in the first half of the year. Orders for Egypt's K-9 and Saudi Arabia's Biho complex are also anticipated. For the Cheongung-II project, the subsidiary Hanwha Systems is in a position to secure 1.2 trillion KRW for radar systems, and Hanwha Defense could secure 400 billion KRW for launchers, based on a 4 trillion KRW order.

Lee Dongheon, a researcher at Daishin Securities, explained, "The improvement in civilian sector performance is clear, and expectations for increased defense exports continue. With the acquisition of Satrec Initiative, Hanwha Group will play a key role in the space industry."

This content was produced with the assistance of AI translation services.