[Click eStock] "Hanwha Aerospace, Export Momentum Continues... Target Price Up"

Goal Raised by 17.6% Compared to Previous Target

On the 26th, Korea Investment & Securities raised the target price for Hanwha Aerospace from 170,000 KRW to 200,000 KRW, anticipating continued export momentum. The investment rating was maintained at 'Buy.'

Researcher Jang Nam-hyun of Korea Investment & Securities explained, "With the existing investment points maintained and risks reduced, we have raised the target price," adding, "In addition to the performance improvement that will fully begin this year, export momentum is also continuing."

Hanwha Aerospace's fourth-quarter results last year exceeded market expectations. On a consolidated basis, fourth-quarter sales increased by 32.6% year-on-year to 3.4424 trillion KRW, and operating profit rose by 83.0% to 295 billion KRW. Researcher Jang said, "Sales and operating profit surpassed the consensus (average securities firms' forecasts) by 25.7% and 23.4%, respectively," explaining, "The better-than-expected performance was due to concentrated recognition of domestic mass production sales such as the 120mm self-propelled mortar, and profitability improvement was driven by the delivery of 18 Polish K9 self-propelled howitzers and 17 Chunmoo multiple rocket launchers."

He expressed the view that the full-scale performance improvement is just beginning. Researcher Jang forecasted, "From this year, Polish export volumes will be delivered in earnest," and predicted, "With the delivery of 60 K9 self-propelled howitzers and 30 Chunmoo units this year, consolidated sales will increase by 17.5% year-on-year to 11.0114 trillion KRW, and operating profit will rise by 35.2% to 952.8 billion KRW." Additionally, deliveries of Egyptian K9 self-propelled howitzers will begin next year, and Australian Redback deliveries will start in 2026. Researcher Jang said, "Accordingly, overseas sales will account for 57.6% of the ground defense sector in 2026," adding, "The mix will improve focusing on highly profitable export volumes, and the consolidated operating profit margin in 2026 will be 9.3%, up 1.8 percentage points from 2023."

The reduction of risks amid sustained export momentum is also positive. Researcher Jang stated, "A 1 trillion KRW Romanian self-propelled howitzer project order is expected this year, the UK MFP (Mobile Fires Platform) project aims to select a business operator in 2025, and exports of K9 self-propelled howitzers to the Middle East, including Saudi Arabia, are increasing due to powerpack localization, sustaining export momentum," adding, "On the other hand, risks have decreased as the amendment to expand the capital limit of the Export-Import Bank passed the National Assembly subcommittee. With the additional 4 trillion KRW limit secured, the Poland K9 2-1 contract announced in 2023 will be executed smoothly, and the 1.6 trillion KRW Chunmoo second contract will also be concluded."

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