SK Securities said on the 7th that exports of defense weapon systems such as the K9 self-propelled howitzer by Hanwha Aerospace are highly likely to expand across Europe and the Middle East in the second half of this year. It issued a new investment opinion of "Buy" and set a target price of 1.9 million won. The previous trading day's closing price of Hanwha Aerospace was 1.45 million won.
SK Securities judged that Hanwha Aerospace's defense exports will expand toward the second half of this year.
Hanwha Aerospace this month signed a follow-up contract worth 2.4 trillion won with its local subsidiary to carry out the third execution contract for the Cheonmu guided rockets with Poland. In February this year, it signed a Cheonmu export contract worth 1.3 trillion won with Norway.
Throughout the year, there are possibilities for multiple order contracts, including Spain K9, Saudi Multi-mission National Guard (MNG), Romania Redback armored, and Poland K9 third execution contract (EC3).
On this, Han Seung-han, a researcher at SK Securities, said, "This year Hanwha Aerospace is expected to continue a trend similar to last year in terms of profitability without a decline in the export share, thanks to increased production volumes of Poland spare parts and India and Egypt K9s, and the start of K9 supplies to Australia."
In particular, the researcher said Hanwha Aerospace's export pipeline is expanding across Europe.
The researcher said, "Among France's candidates for multiple launch rocket systems, local assessments indicate Cheonmu is strongly favored over the U.S.-made High Mobility Artillery Rocket System (HIMARS) and the Israel-Germany joint PULS, raising the likelihood of orders," adding, "Alongside Poland's K9 EC3, Finland and Estonia have steadily been budgeting for additional K9 acquisitions since last year, increasing the likelihood of orders within the year."
Exports to the Middle East also are likely to expand. The researcher said, "In the Saudi Ministry of National Guard (MNG) project, the decision-making timing could be delayed from the first half to the second half due to the Iran war, but it is only a matter of timing. In fact, the war has narrowed the prospects of China, a competitor, thereby increasing Hanwha Aerospace's chances of winning orders."
The researcher added, "In particular, following the early delivery of Cheongung II to the Middle East and requests for additional quantities, even an export contract for the long-range surface-to-air guided weapon (L-SAM) is anticipated, and the order momentum is expected to expand further toward the second half."