Hanwha Aerospace Maintains Top Spot in Net Foreign Purchases Since Trump’s Inauguration
K-Defense Industry Continues to Benefit from Increased European Defense Spending
Another major shift has occurred in the market capitalization rankings of the Korea Exchange (KOSPI). Hanwha Aerospace, which has consistently held the top spot for net foreign purchases since the inauguration of U.S. President Donald Trump, has now surpassed Hyundai Motor following Kia, rising to fifth place in market capitalization.
According to the financial investment industry on May 8, Hanwha Aerospace closed at 890,000 won the previous day, up 8.80%. On this day, Hanwha Aerospace hit a new 52-week high and recorded a market capitalization of 40.5672 trillion won, overtaking Hyundai Motor (39.2865 trillion won), which ended slightly lower on the same day, to claim the fifth spot in market capitalization. Since the beginning of this year, Hyundai Motor's share price has dropped by about 11% due to tariff shocks originating from the United States. In contrast, Hanwha Aerospace's share price has soared by more than 140% on the back of the favorable conditions for the "K-defense industry," resulting in a stark contrast in fortunes.
The main driver of the stock price surge on this day was expectations for overseas orders. News that HD Hyundai Heavy Industries and Hanwha Ocean have jointly proposed a bid for the Canadian Navy's submarine replacement project, valued at up to $24 billion (about 33 trillion won), sent both stocks higher. Meanwhile, Hanwha Aerospace also attracted buying interest after it was reported to have submitted a proposal to supply K-9 self-propelled howitzers and rocket launchers to the Canadian Army. Local Canadian media outlet CBC projected that if the supply contract is secured, the deal could be worth up to $1 billion (about 1.4 trillion won).
The ongoing strength of shipbuilding and defense stocks this year has intensified the competition for top spots in KOSPI market capitalization rankings. As recently as early last year, there were no shipbuilding or defense companies within the top ten by market capitalization on the KOSPI. However, on April 11, Hanwha Aerospace overtook Celltrion and Kia to claim sixth place, while HD Hyundai Heavy Industries surpassed KB Financial Group and Naver to take ninth place. As Hanwha Aerospace surpassed Hyundai Motor on this day, HD Hyundai Heavy Industries also climbed two more spots in the rankings.
Tae Yoonseon, a researcher at KB Securities, stated, "As of the end of last month, the market capitalization of Hanwha Aerospace and HD Hyundai Heavy Industries had increased by 453% and 217%, respectively, compared to the end of last year. Amid continued volatility in global financial markets due to President Trump's strong tariff policies, the fact that these sectors are relatively unaffected by tariffs has made them attractive to investors." Additionally, the escalation of military tensions between India and Pakistan, as well as conflicts between Israel and Yemen's Houthi rebels, are also positive factors for the defense industry.
As Hanwha Aerospace competes with Samyang Foods for the next "emperor stock" title following Samsung Biologics, the securities industry is issuing optimistic forecasts. Lee Jaekwang, a researcher at NH Investment & Securities, said, "Given the establishment of a joint venture with Poland's WB Group for the production of Cheonmu guided missiles and the ongoing push for a K-9 self-propelled howitzer production plant in Romania, the visibility of benefits from Europe's increased defense spending has risen," raising the target price from 870,000 won to 1 million won.
Suh Jaeho, a researcher at DB Securities, also raised the target price from 880,000 won to 1 million won, stating, "Considering the increase in global weapons demand, excess annual ammunition demand (about 2.5 million rounds), and the medium- to long-term growth potential through overseas business expansion, the profit growth trend is expected to continue." In addition, Kiwoom, Kyobo, Mirae Asset, and Korea Investment & Securities have all set target prices above 1 million won.
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