[Click eStock] Hanwha Aerospace, a Defense Company Capable of Land, Sea, and Air Operations

Kiwoom Securities Report

Kiwoom Securities on the 21st issued a buy rating and a target price of 180,000 KRW for Hanwha Aerospace. This is based on the assessment that it will grow into the largest defense company in Korea, covering aviation, ground, and maritime sectors.

Hanwha Aerospace operates in various fields including aircraft engines, defense, security, IT services, and aerospace. As of last year, the sales composition was 50% from the defense sector, 19% from aircraft engines, 14% from security, and 7% from IT services. The main products in the defense sector are self-propelled artillery and armored vehicles, with the core product K9 self-propelled howitzer being a bestseller holding a 45% market share globally.

Han-gyeol Lee, a researcher at Kiwoom Securities, stated, “They are promoting the aerospace business as a new venture, responsible for launch vehicle and satellite manufacturing as well as satellite service provision,” adding, “With the acquisition of Daewoo Shipbuilding & Marine Engineering last September, growth as the largest defense company in Korea covering aviation, ground, and maritime sectors is expected.”

Last year, the company signed an export contract worth approximately 8 trillion KRW for K9 self-propelled howitzers and Chunmoo with Poland. Additionally, export contracts with the UAE and Egypt were signed, resulting in a backlog of orders in the ground defense sector reaching 19.8 trillion KRW by the end of last year, nearly quadrupling compared to the end of 2021.

In the fourth quarter of last year and the first quarter of this year, 24 units of K9 self-propelled howitzers were delivered to Poland each quarter, achieving two consecutive quarters of performance surprises. With additional deliveries of K9 self-propelled howitzers and Chunmoo starting from the fourth quarter of this year, performance growth is expected through 2025. The company’s projected sales for this year are 8.8078 trillion KRW, and operating profit is expected to be 699.5 billion KRW, representing growth of 34.7% and 85.4% respectively compared to the previous year. The Hanwha defense sector is expected to be fully reflected in the performance, and additional deliveries of K9 self-propelled howitzers and Chunmoo from the fourth quarter are anticipated to contribute to sales growth and profit improvement.

Researcher Han-gyeol Lee analyzed, “If a second contract with Poland is signed, mid- to long-term performance is expected to rise even more steeply,” adding, “Discussions are underway with several countries including Romania, India, the UK, and Australia for additional exports, and there is positive anticipation for winning contracts for follow-up projects to Nuriho and next-generation launch vehicle development.”

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