[Click eStock] Hanwha Systems, Profit Volatility Increases with New Business Investment and Daewoo Shipbuilding Acquisition Participation

IBK Investment & Securities Report

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating on Hanwha Systems on the 26th and set a target price lowered by 25% to 15,000 KRW.

The expected Q4 earnings are projected at 695.7 billion KRW in sales and 8.9 billion KRW in operating profit, representing increases of 2.4% and 21.4% respectively compared to the same period last year. Sales growth is anticipated in the defense sector due to the fourth mass production of TICN and early operationalization of military satellite communications. Despite increased recurring development expenses from AI investments in the ICT sector and losses from new business investments, operating profit is expected to improve due to increased defense sales.

Researcher Sanghyun Lee of IBK Investment & Securities stated, “From next year, we expect a recovery trend as the company partially offsets losses from new business investments through the combined benefits of K-defense orders and improved performance in the ICT sector.”

Regarding defense companies’ orders from Poland, it is expected that electronic equipment supplies worth approximately 5-10% of the prices of K2 tanks and K9 self-propelled howitzers will be possible. On June 28, a comprehensive discussion began related to the introduction of Korean weapon systems by signing a technology and business cooperation agreement with Polish defense company WB Group.

Researcher Lee explained, “We reflected the increased profit volatility outside the core business due to new business investments and participation in the acquisition of Daewoo Shipbuilding & Marine Engineering. In the core business, we expect to benefit from K-defense exports, and the turnover point for investment losses in space, UAM, and blockchain is projected around 2025.”

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