[Click eStock] "Hanwha Systems, Defense Industry Leading Continued Earnings Growth Expected"

NH Investment & Securities maintained a target price of 26,500 KRW and a 'Buy' rating on Hanwha Systems on the 7th, stating that the defense-led earnings growth trend is expected to continue.

Researcher Lee Jae-kwang said, "Operating profit in the third quarter is expected to continue increasing compared to the previous year," and added, "Future earnings growth led by defense is also expected to continue."

Defense-led earnings include the delivery of the UAE and Saudi Cheongung-II multifunction radar and the delivery of the fire control system for the 4th batch of K2 tanks in Poland and domestically.

He also forecasted, "If progress goes as planned, the Fili shipyard, which will be consolidated into earnings from next year, is expected to become a growth engine replacing Overair."

Operating profit for the third quarter of this year is expected to increase by 26% year-on-year to 47 billion KRW. This is lower than the second quarter, which was focused on the Poland K2 project. However, net profit is expected to improve due to a base effect from one-time losses related to Overair incurred in the second quarter.