[Click e-Stock] "Hanwha Systems, Target Price Raised on Space Business Value"

Buy Rating Maintained
Target Price Raised to 137,000 Won

On the 13th, DS Investment & Securities maintained its Buy rating on Hanwha Systems and raised its target price to 137,000 won.

Kang Taeho, an analyst at DS Investment & Securities, stated, "Hanwha Systems is expected to solidify its position as a key operator in building a military observation and communication satellite network, based on its stable profit generation from the defense sector and the space value chain within the Hanwha Group."

He analyzed that growth in defense-related revenue will begin in earnest next year rather than this year. Analyst Kang said, "In the defense segment of Hanwha Systems this year, profit growth is expected to be limited, as spending on self-funded R&D for export items and space-related projects will increase," but added, "However, in 2027, with export expansion and the full-scale start of mass production, both top-line and profit are expected to grow together." He also estimated this year's operating loss at Philion at 17.5 billion won and noted that the size of the loss is expected to shrink significantly.

In particular, he explained that, in the case of the space industry, both short-term events and mid- to long-term pipelines are coming to the fore at the same time. He said, "As of last year, space-related business accounted for around 18% of defense revenue, meaning the company is already carrying out numerous space projects," and added, "In the second half of this year, a contractor will be selected for the multi-ministry small SAR satellite project. Given its experience in manufacturing, launching, and operating its own satellites, as well as the opening of the Jeju Space Center, which has enabled it to secure capacity to manufacture two SAR satellites per month, the probability of winning the order is high." He emphasized that, over the mid- to long term, the company is also highly likely to play a key role in communication satellite projects such as building commercial low Earth orbit (LEO) communication networks and K-LEO (TICN 2.0).

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