[Click eStock] "Even if Russia-Ukraine end war, Han Bangsan will continue strong performance and stock price"

Even if the Russia-Ukraine war, which has lasted for about 2 years and 7 months, ends in the future, the strong performance of defense companies and the explosive stock price trend are expected to continue, according to securities industry forecasts.

On the 12th, Byun Yong-jin, a researcher at IM Securities, said, "The global competition for arms orders and the role that Korean defense companies play in the global defense market will continue to grow."

Researcher Byun stated, "It is reasonable to see that the end of the war is not far off regardless of which side wins the U.S. presidential election." He added, "The war that began with Russia's invasion of Ukraine in February 2022 has entered its third year, and the prolonged conflict, which defied expectations, has caused extreme fatigue not only for both sides but also for related countries such as the U.S. and Europe. Ukraine, which is barely sustaining the war with Western support, has been preparing more actively for peace since the summer when the likelihood of former U.S. President Trump, who declared a halt to weapons support, winning the election increased."

Regarding investment sentiment in the defense industry, he said, "While the end of the war may be negative in the short term, the full-scale war between modern nations, which was previously considered unlikely, has fundamentally changed the vague belief in peace. As long as Russia and Ukraine cannot reconcile peacefully, the competition among countries to secure peace through strength and deterrence of war is only just beginning."

The power losses of Ukraine and Western countries, the current parties to the war, are also at a serious level. The heavy weapons provided to Ukraine by European Union (EU) countries include 829 tanks and 634 155mm and 152mm howitzers, accounting for 21.4% and 30.7% of the total EU holdings, respectively. The number of tanks lost in the Ukraine war, including Ukraine's existing stock, has already reached 919.

Korea is considered the virtually only country to fill this power gap. Researcher Byun explained, "Poland, the closest country, was the first to place a large order for weapons from Korea. Poland has provided 324 tanks to Ukraine and plans to order about 1,000 K2 tanks, three times that number, through a basic supply contract signed with Korea in 2022." He also noted, "There are clear ordering movements from European countries, such as Romania ordering 54 K9 self-propelled howitzers."

He added, "Korean defense companies are doubling their production capacity to meet the surging demand. Hyundai Rotem's delivery of K2 tanks is expected to increase from 56 units this year to 96 units next year. Hanwha Aerospace has expanded its production line to increase the delivery of K9 self-propelled howitzers from about 80 units per year in the past to 160 units per year, and plans to secure a production capacity of about 240 units soon."