Kiwoom Securities said on the 22nd that Hanwha Aerospace holds a variety of order pipelines in Europe and the Middle East, so a sharp increase in orders is expected this year. It maintained its investment opinion "Buy" and raised its target price to 16.5 million won. Hanwha Aerospace's previous closing price was 13.15 million won.
Kiwoom Securities projected that Hanwha Aerospace's fourth-quarter results last year will miss market expectations, with revenue of 8.7921 trillion won and operating profit of 1.0608 trillion won.
It analyzed that this was due to limited profitability improvement as one-off labor costs were reflected from the expansion of freight charges and bonus expenditure that were not recognized in the first half from the expense side. It also estimated that weak results at major subsidiaries negatively affected the improvement in operating profit.
However, given that it holds a variety of order pipelines in Europe and the Middle East, it said a sharp increase in orders is expected this year.
Lee Han-gyeol, a Kiwoom Securities researcher, said, "The ground defense division has the most diversified product lineup across mobility, firepower, air defense, and ammunition weapon systems."
The representative pipeline of the mobility weapon system is Romania's new infantry fighting vehicle (IFV) procurement project worth about 5 trillion won, with a contractor selection scheduled in the first half of this year.
The researcher said, "For the firepower weapon system, a sharp increase in orders is expected centered on the K9 and Cheonmu," and predicted, "K9 orders will increase this year in Europe, including Spain, Estonia, and Finland."
Cheonmu is a strong contender in Norway's next-generation long-range missile project worth 2–3 trillion won and is competing with HIMARS. It also said that for Saudi Arabia's army modernization project, orders for various weapon systems such as the K9, Cheonmu, and armored vehicles are being discussed.
The researcher said, "Considering the size of order pipelines under discussion in Europe and the Middle East, we expect this year's orders to increase sharply from last year."