[Click eStock] "Hanwha Aerospace, Expecting Acquisition of Daejoyang ... Target Price Up"

Shinhan Investment Corp. raised the target price for Hanwha Aerospace from 120,000 won to 138,000 won on the 6th. This reflects the continued positive performance as well as the potential for business expansion, including the acquisition of Daewoo Shipbuilding & Marine Engineering.

Hanwha Aerospace is expected to record sales of 1.7601 trillion won and an operating profit of 108.5 billion won in the first quarter of this year. These figures represent increases of 28% and 63%, respectively, compared to the same period last year, significantly exceeding market expectations. However, the market estimates only partially reflect the consolidated performance of Hanwha Corporation's defense division.

As the Russia-Ukraine war prolongs, uncertainties in export orders have been a burden on defense stocks' prices. Nevertheless, demand to replenish depleted weapon inventories is expected to continue even after the war. According to media reports, the Romanian Ministry of National Defense has requested parliamentary approval to purchase K9 howitzers. If the order is secured, it is expected to become a growth axis along with Poland. Securing cash flow through advance payments is also positive.

Myeong Ji-woon, a researcher at Shinhan Investment Corp., stated, "Through the New Vision Townhall event integrating defense affiliates, a vision of '40 trillion won in sales and 5 trillion won in operating profit by 2030' was announced," adding, "Regardless of feasibility, business expansion and large-scale investments are expected to follow," explaining the reason for raising the target price. He also added, "Next is the acquisition of Daewoo Shipbuilding & Marine Engineering," noting, "With EU approval completed, overseas approvals are finished, and Fair Trade Commission approval is only a matter of time. Additional vision announcements are expected after the acquisition."