KB Securities, "Hanwha Aerospace Target Price 92,500 KRW... Up 26.7%"

[Asia Economy Reporter Park So-yeon] KB Securities has raised the target price of Hanwha Aerospace to 92,500 KRW.

According to FN Guide on the 28th, KB Securities recently stated in a report on Hanwha Aerospace that "the target price is raised by 26.7% from the previous 73,000 KRW to 92,500 KRW." The investment opinion remains a buy.

This reflects adjustments in earnings estimates based on business restructuring and large-scale orders in the defense sector, as well as the effects of changes in the 1-year Monetary Stabilization Bond and 30-year Treasury Bond yields, and beta changes.

KB Securities said, "Since starting coverage of Hanwha Aerospace (formerly Hanwha Techwin) in March 2017, we have focused on the potential for growth as the Korean version of Lockheed Martin due to the international competitiveness of major defense products and synergies among defense businesses within the group," adding, "With recent business adjustments in the group's defense sector and large-scale overseas orders, the potential we noted five years ago is now becoming a reality."

Hanwha Aerospace recently announced a business restructuring plan through multiple disclosures. The core of the plan is to absorb and merge its 100% subsidiary Hanwha Defense and acquire the defense division of Hanwha Corporation for 786.1 billion KRW after its spin-off. To secure funding and reorganize the business accordingly, it plans to sell Hanwha Precision Machinery (525 billion KRW), Hanwha Power Systems (210 billion KRW), and others to Hanwha Corporation.

KB Securities mentioned, "This business restructuring strengthens the identity as a total defense solutions company, and synergies are expected from joint sales, integrated development, and shared infrastructure utilization." Hanwha Corporation’s defense division produces various explosives and ammunition, Hyunmoo ballistic missiles, Chunmoo multiple launch rockets, lasers, underwater acoustic sensors, navigation devices, and more.

With the recent signing of a basic contract with the Polish government to supply 648 K9 units, the possibility of a significant increase in Hanwha Defense’s sales and profits has grown. KB Securities reflected estimates assuming 48 units produced in Korea and supplied, and 600 units produced and supplied by a local joint venture. When the final contract is signed, estimates will be revised accordingly. Based on the current assumptions, sales to Poland are expected to reach 3.94 trillion KRW over the next 10 years.

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