[Click eStock] Hanwha Aerospace, Q2 Earnings Expected... Target Price Raised to 290,000 Won

Meritz Securities raised the target price for Hanwha Aerospace from 250,000 KRW to 290,000 KRW on the 9th, citing expectations of strong second-quarter earnings. The investment rating was maintained as 'Buy.'

Jiho Lee, a researcher at Meritz Securities, stated in a report on the same day, "Following the successful order of the Romania-bound K9 project (approximately 1.3 trillion KRW) in June, steady performance continues. There remain multiple potential orders, including Romania-bound Redback, Cheonmu, and Latvia-bound K-21, so consistent growth is expected." He added, "Accordingly, we are raising the fair stock price from 250,000 KRW to 290,000 KRW based on changes in applied BPS."

Hanwha Aerospace's second-quarter sales are expected to reach 2.7 trillion KRW, with an operating profit of 214.7 billion KRW, slightly exceeding consensus estimates.

Researcher Jiho Lee analyzed, "Although the first quarter showed sluggishness due to the absence of revenue recognition from Poland-bound main equipment sales, the current quarter is expected to normalize as 18 units of Cheonmu and 6 units of K9 are reflected in the performance." He further explained, "Of the total 30 Cheonmu units delivered in the second quarter, 12 units delivered in June are expected to be recognized in the third quarter, considering the 1.5 months required for integration with local chassis and additional testing and approval schedules."

He viewed the end of the Russia-Ukraine war as an opportunity for the domestic defense industry. Rather than focusing solely on the keyword 'end of war,' attention should be paid to the structural situation where dependence on Korean-made weapons is inevitably increasing.

Researcher Jiho Lee stated, "Considering comprehensively that the end or ceasefire of the Russia-Ukraine war does not mean the end of growth in defense spending, and that Trump explicitly demanded an increase in defense cost-sharing ratios among NATO and European countries, Europe will have to fill the void left by the U.S. on its own. Therefore, opportunities for the domestic defense industry are expected to expand."