[Click eStock] "Hanwha Aerospace, Q4 Profitability Slows... Target Price Down"

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained a buy rating on Hanwha Aerospace on the 24th, stating that profitability declined due to one-time factors reflected in the fourth quarter, and set a target price of 46,000 KRW, down 9% from the previous target.

In the fourth quarter, Hanwha Aerospace's sales amounted to 1.5981 trillion KRW, a 3.3% decrease compared to the same period last year. Operating profit recorded 35 billion KRW, down 35% during the same period.

Kim Hong-gyun, a researcher at DB Financial Investment, said, "One-time factors such as 17 billion KRW in litigation costs for the Korean helicopter development project, 8.9 billion KRW in PMI costs related to the acquisition of EDCA, 3.4 billion KRW related to the withdrawal of Hanwha Techwin's Tianjin factory in China, and 4 billion KRW paid as technology fees for local production of K9 by Hanwha Defense were reflected, causing profitability to decline compared to the same period last year."

The company is expected to continue its performance improvement this year. This is because sales recognition from the acquired U.S. company HAU will be added, and performance is expected to improve in both defense and civilian sectors. Researcher Kim Hong-gyun forecasted, "The first quarter is expected to have the lowest performance among the quarters this year due to deterioration in sales composition and increased marketing expenses, but overall performance improvement will be clearly evident throughout the year."

He added, "If there is meaningful news of defense export orders, corporate value will increase," and explained, "Profitability in the civilian business will become more distinct this year."