[Click eStock] "Korean Defense Companies Aim to Boost Global Market Share Beyond Domestic Sales"

Hana Securities evaluated on the 3rd that domestic companies in the aviation and defense industries are increasing their market share in the global defense market. The overall market size is also expected to grow in light of the international situation.

Researcher Wi Kyung-jae stated, "Domestic defense companies have started to look overseas," and analyzed, "While domestic sales for national defense were the focus until now, it is now global."

Researcher Wi said, "They have begun to expand exports of weapon systems based on price competitiveness and delivery competitiveness," adding, "Although Korea's weapon system export-import ratio is still below 1, which is lower compared to the US (mid-10s) and Germany (about 10), the trend is positive."

He also pointed out, "While the export-import ratios of many countries are either stagnant or declining, only Korea is sharply rising and increasing its market share in the global defense market," and noted, "Amid rising geopolitical tensions, the demand for weapon replacement remains valid."

Hana Securities presented Hanwha Aerospace as the top pick within the sector. The target market capitalization is KRW 14.7 trillion, and the target stock price is KRW 289,000.

Researcher Wi said, "If new orders have been the driving force behind the stock price increase so far, future trends will be based on profits," and added, "Hanwha Aerospace is expected to see simultaneous increases in sales and profits as it begins full-scale delivery of export volumes such as the K9 self-propelled howitzer and the Chunmoo multiple launch rocket system, so a buying approach remains valid."

He continued, "In addition, the high possibility of additional orders and being selected as the next-generation launch vehicle operator increase the visibility of performance growth from a long-term perspective," and added, "We recommend a buying approach from all medium- to long-term perspectives."