[Click eStock] Hanwha Aerospace Expected to Build Sustainable Mid- to Long-Term Growth Foundation Through Rights Offering... Target Price Raised

Target Price Raised by 3% Compared to Previous Estimate

On August 4, NH Investment & Securities raised its target price for Hanwha Aerospace from 1.2 million won to 1.235 million won, citing expectations that the company will establish a foundation for sustainable mid- to long-term growth through a rights offering. The investment opinion was maintained as 'Buy'.

Lee Jaekwang, an analyst at NH Investment & Securities, stated, "We have raised our target price by 3% compared to the previous estimate, reflecting the rise in the share price of Hanwha Ocean, a consolidated subsidiary." He added, "A total of 4.2 trillion won has been raised through the rights offering. Of this, 1.3 trillion won from the third-party allotment was reflected in the second quarter financial statements, and 2.9 trillion won from the shareholder allotment will be reflected in the third quarter. The rapid establishment of overseas production bases and the expansion of the business portfolio are expected to lay the foundation for sustainable mid- to long-term growth."

Exports of Cheonmu and armored vehicles are expected to increase. Lee explained, "For Cheonmu, exports to Europe are expected to expand through local production in Poland, and exports to the Middle East are also expected to rise due to the development of extended-range ballistic missiles. The development of anti-ship ballistic missiles may also lead to increased exports to Southeast Asia." He continued, "For armored vehicles, export competitiveness is being strengthened by increasing the proportion of domestically produced components, and the likelihood of armored vehicle exports to Romania and Saudi Arabia is considered high."

The ground defense division of Hanwha Aerospace continued to show year-on-year growth due to increased exports to Poland. In the second quarter, sales in the ground defense segment rose by 33.4% year-on-year to 1.7732 trillion won, while operating profit surged by 113.2% to 554.3 billion won. Lee noted, "The sharp increase in operating profit and operating margin is attributed to the growth in highly profitable export sales." He added, "Domestic sales increased by 20.8% to 690 billion won, while export sales rose by 42.8% to 1.083 trillion won. The increase in exports of K9 and Cheonmu to Poland contributed to this growth, and the order backlog reached 31.7 trillion won, up 4.7% year-on-year. Based on the cumulative ground defense sales over the past four quarters, this represents about four years' worth of work."

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