Hanwha Systems Projected to Achieve 146% Operating Profit Growth This Year [Click e-Stock]

Yuanta Securities Sets Target Price at 169,000 Won
"Operating Profit Expected to Grow 145.7% Year-on-Year"

On May 7, Yuanta Securities maintained its "Buy" investment rating on Hanwha Systems and set its target price at 169,000 won.

Paek Jongmin, a researcher at Yuanta Securities, stated, "Given the unique business portfolio of Hanwha Systems spanning space, defense, and shipbuilding, we have applied a relatively high target multiple to reflect its attractiveness."

Paek projected Hanwha Systems' sales and operating profit for this year to reach 4.5932 trillion won and 303.6 billion won, up 25.4% and 147.5% year-on-year, respectively. He explained that revenue recognition from Cheongung II MFR exports to the United Arab Emirates (UAE) and Saudi Arabia is expected to expand, while mass production of the KF-21 and LAH programs is likely to drive further growth. "As the loss-making ship types at the US Philly Shipyard are delivered in the first half of the year, operating losses are also expected to narrow," he added. He also noted that although research and development expenses related to defense exports and space businesses will increase by 40 billion won, the impact is likely to be limited relative to the scale of growth.

Paek assessed that all elements of Hanwha Systems' business portfolio are stable. In the space sector, he noted that Hanwha Systems has secured a leading position in the ultra-small satellite system development project for the Korean military, worth 1.4 trillion won, starting in the second half of this year. "The Jeju Space Center, completed at the end of last year with an annual production capacity of up to 100 satellites, is expected to serve as a competitive advantage," he said. Accordingly, he forecast that space business revenue will exceed 1 trillion won by 2030. In the defense sector, he stated that global interest in Cheongwang, an anti-drone laser weapon, has been confirmed, and Hanwha Systems is expected to evolve into a comprehensive systems integrator in the future. Regarding shipbuilding, Paek highlighted that Hanwha Systems entered the US Navy business just one year after acquiring Philly Shipyard. "Once a construction contract is secured, Philly Shipyard is expected to serve as a production base," he added.

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