Daol Investment & Securities said on the 26th that Hanwha Aerospace is expanding its order pipeline to Spain, the United States, and Saudi Arabia. It maintained a Buy rating and raised the target price by 36% to 2.04 million won from 1.5 million won. The previous session's closing price was 1.261 million won.
Daol Investment & Securities analyzed that Hanwha Aerospace's first-quarter results this year started with a slow start because deliveries for ground defense exports were small. It expected results in the second to fourth quarters to continue to grow on a quarterly basis this year.
Choi Gwang-sik, an analyst at Daol Investment & Securities, said, "Outside Poland, there are questions about profitability in Egypt and Australia, but the company will maintain high margins through improved proficiency from continuous mass production and economies of scale," and added, "As Hanwha Aerospace's standing has risen, fair prices have been reflected in recently won new and repeat orders."
Choi cited as a strength that Hanwha Aerospace has a large and diverse pipeline worth 60 trillion won.
Choi said, "The pipeline is full, including preferred bidder status for Spain's self-propelled howitzer project, the U.S. next-generation self-propelled howitzer program (preferred bidder selection in July), speculation that European countries will adopt Cheonmu, the Ministry of National Guard (MNG) project in Saudi Arabia, and the possibility of an early contract for guided missiles (L-SAM) due to rising surface-to-air demand in the Middle East."
Choi reassessed the value of the order pipeline and analyzed that the fair value is 2.04 million won. This combines 92 trillion won for the value of the backlog and 15 trillion won for the pipeline value.