On the 2nd, Korea Investment & Securities positively evaluated Hanwha Systems' momentum for expanding exports of CMS (Combat Management System) installed on warships and the prospects of AESA radar, raising the target price to 25,000 KRW while maintaining a 'Buy' investment rating.
Researcher Jang Nam-hyun stated, "We believe there is no longer a need to be discounted compared to global peers," adding, "This is because Hanwha Systems has closed the technological gap by supplying next-generation electronic equipment to aviation, warships, and ground weapons."
He further explained, "Both joint exports with the main system and individual exports of electronic equipment are increasing, marking the beginning of an overseas sales expansion phase," and analyzed, "The export ratio within defense sales in 2024 is expected to reach 16%, up 8 percentage points from the previous year."
In particular, he positively evaluated Hanwha Systems' momentum for expanding exports of CMS installed on warships. The CMS for the Korean next-generation destroyer (KDDX) currently under development is also being developed by Hanwha Systems. For submarine CMS, Hanwha Systems is conducting system development as the main contractor for the Dosan Ahn Changho-class submarine (KSS-III Batch-I).
Researcher Jang said, "CMS is a system naturally co-exported when warships are exported as it is installed internally," adding, "It is estimated to account for about 7% of the total warship construction cost, and when combined with radar costs, it is estimated to exceed 15%."
He also forecasted positive prospects for both domestic and export markets of AESA radar. Previously, Hanwha Systems signed an initial mass production radar supply contract worth 114.8 billion KRW on June 25. Additionally, it is currently undertaking the Korean next-generation destroyer radar system development project worth 302.3 billion KRW.
Researcher Jang noted, "Exports of AESA radar will also occur," pointing out, "The Cheongung-II missile equipped with AESA radar continues to show strong export momentum, mainly in Europe and the Middle East." Potential export target countries include Romania, Iraq, and Saudi Arabia.
He added, "Domestic exports will also increase," forecasting, "In May, a contract was signed with Italy's Leonardo for supplying AESA radar antennas for light attack aircraft, and based on this contract, they plan to jointly develop AESA radar for light attack aircraft to enter the European light fighter AESA radar market."
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