NH Investment & Securities announced on the 12th that it is raising the target price for Hanwha Aerospace from KRW 270,000 to KRW 300,000 due to new orders and an upward revision of the subsidiary's equity value. The investment rating of 'Buy' was also maintained.
Researcher Lee Jaegwang explained the reason for raising the target price: "We reflected new orders such as Poland's Cheonmu, Korea's KF-21 engine, and Romania's self-propelled artillery to revise future estimates upward, and adjusted upward the EV of Hanwha Industrial Solutions, which is scheduled to be spun off in September, as well as the increased equity value of the overlapping listed subsidiaries (Hanwha Ocean and Hanwha Systems)."
Lee said, "Considering the split ratio, the market capitalization of the newly established company to be spun off in September is expected to be between KRW 1 trillion and KRW 1.5 trillion," adding, "Given that the operating profit in 2023 is around KRW 100 billion, this corresponds to about 10 to 15 times the operating profit."
He added, "Considering that Hanmi Semiconductor is currently trading at about 70 times the expected operating profit this year, there is a possibility of an increase in combined shareholder value after the spin-off," and "According to media reports, Hanwha Precision Machinery (a 100% subsidiary of the newly established spin-off company) is currently being evaluated by SK Hynix for HBM TC bonders, and if it passes, large-scale orders are expected in the second half of the year."
He also noted, "Second-quarter earnings are expected to increase year-on-year and quarter-on-quarter due to an increase in the number of deliveries of Poland's K9 and Cheonmu," explaining, "Currently, the first contract deliveries are underway, with K9 expected to be delivered 42 units in 2023 and 64 units in 2024, and Cheonmu expected to be delivered 17 units in 2023 and 32 units in 2024."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
