[Featured Stocks] Hanwha Aerospace and Hyundai Rotem Both Break Record Highs Together

Record Highs Set in Succession After Listing
Defense Industry Expected to Post All-Time High Q2 Earnings
Also Highlighted as a 'Trump Beneficiary Stock'

Hanwha Aerospace and Hyundai Rotem both hit 52-week highs, reaching their all-time highest prices since listing. This is attributed to expectations of record-breaking second-quarter earnings and the prominence of defense stocks as representative 'Trump beneficiaries.'

Hanwha Aerospace, the leading domestic defense stock, was trading at 300,000 KRW as of 9:28 AM on the 24th, up 4.53% (13,000 KRW) from the previous day. This far surpassed the previous all-time high of 288,500 KRW recorded on the 18th. Hyundai Rotem, considered one of the domestic 'Big 4 Defense Companies' alongside Hanwha Aerospace, was trading at 47,300 KRW, up 2.05%. Hyundai Rotem also set a new all-time high again, surpassing its 2018 record of 45,500 KRW by reaching an intraday high of 46,550 KRW during the previous trading day, marking the highest price in six years.

According to the securities industry, Hanwha Aerospace is expected to record its highest-ever operating profit of 205.9 billion KRW in the second quarter of this year. Hanwha Aerospace has signed export contracts for Poland, the K9 self-propelled howitzer, and the Chunmoo multiple rocket launcher, and on the 9th, it signed a K9 export contract worth 1.38 trillion KRW with Romania. The K9 is known as the world’s number one self-propelled howitzer in market share. Hyundai Rotem, which is beginning full-scale exports of K2 tanks to Poland, is also expected to post an operating profit of 78.6 billion KRW, a 558% increase compared to the previous year. Including LIG Nex1 (2.63%) and Korea Aerospace Industries (1.21%), the combined operating profit of the domestic Big 4 defense companies in the second quarter is expected to approach a record high of 400 billion KRW.

Defense stocks are also considered representative beneficiaries of Donald Trump, the U.S. presidential candidate with a high likelihood of winning. If Trump is elected, it is expected that the U.S. will strengthen its 'isolationism,' prompting countries worldwide to pursue their own military build-ups. Lee Woong-chan, a researcher at Hi Investment & Securities, said, “Trump is pressuring NATO to increase defense spending, and the strengthening of cooperation between Korea and NATO will lead to expanded opportunities for Korea’s defense exports in the mid to long term.”