[Click eStock] "Hanwha Aerospace to Meet 2Q Earnings Expectations"

IBK Investment & Securities forecasted on the 19th that Hanwha Aerospace's expected Q2 earnings will generally meet consensus estimates. The investment rating 'Buy' and target price of 160,000 KRW were maintained.

Lee Sang-hyun, a researcher at IBK Investment & Securities, stated, "Q2 sales are expected to be 2 trillion KRW, operating profit 129.9 billion KRW, and operating profit margin around 6.5%."

In Q1 this year, operating profit recorded a surprise increase of 385% year-on-year to 228.5 billion KRW. This was driven by the defense sector since Q4 last year. With the incorporation of Hanwha Co., Ltd.'s defense division, the defense segment's operating profit margins for Q4 last year and Q1 this year were 16.3% and 21.0%, respectively, both in double digits. The operating profit contribution also accounted for 102% and 77%, respectively.

In Q2, the Aero division is expected to see increased sales in LTA (Long-Term Agreement parts business) and increased deliveries of GTF (Geared Turbofan next-generation engine) engines, following the recovery trend in the aviation industry. The researcher analyzed, "While profits from LTA and military businesses will increase, RSP (International Joint Development Project) costs are expected to rise due to the increase in GTF engine deliveries."

The defense division had a high margin in Q1 due to recognition of gap filler volumes for Poland, but Q2 is expected to normalize somewhat. The researcher predicted, "However, FA-50 engine deliveries are being reflected, and in the second half of the year, sales recognition for Poland-bound K9 and Cheonmu will increase, leading to a return to double-digit operating profit margins."

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