[Click eStock] "Hanwha Aerospace, Order Backlog Steadily Trending Upward... Target Price Up"

Target Price Raised by 56.3% Compared to Previous Estimate

On the 28th, SK Securities raised the target price for Hanwha Aerospace from 160,000 KRW to 250,000 KRW, citing a steady upward trend in its order backlog. The investment rating was maintained at 'Buy.'

Na Seung-du, a researcher at SK Securities, explained, "The target price was calculated by applying a forward 12-month price-to-earnings ratio (PER) band upper limit of 21.4 times since 2022 to the average expected earnings per share (EPS), which was derived by raising this year's and next year's net profit forecasts by about 18% compared to the previous estimates. With new exports and orders increasing, the market consensus (average securities firm forecast) for performance is being revised upward, and with additional export momentum still alive, it is fully possible to assign a premium as a representative K-defense company after business restructuring."

In April, concerns about intensified competition grew after a German company was selected for the UK's next self-propelled artillery procurement project and the first-quarter results failed to meet market expectations. Researcher Na stated, "We believe these concerns are unfounded and that instead of reacting to quarterly results, more focus should be placed on steady annual growth. The order backlog, which now exceeds 30 trillion KRW with additional export items such as Cheonmu besides self-propelled artillery, is steadily rising, and it is time to dispel doubts about mid- to long-term growth potential."

As announced in April, it is expected that the completion of the personnel split in the second half of the year will further concentrate defense industry capabilities. Researcher Na said, "The main point is to separate the defense and civilian business sectors to focus more on each business area. This will lead to an expansion of the export front beyond the already best-selling K-9 self-propelled artillery to armored vehicles, Cheonmu, ammunition, submarines, satellites, and more. From Korean launch vehicle technology to the utilization of satellite data, the space business will also enable faster and more precise decision-making."