Hanwha Aerospace: Leading the Defense and Aerospace Industry

Hanwha Aerospace (012450) has recently gained attention due to the strong performance of its defense sector and the growth of its aerospace business. LS Securities has rated the company as a 'BUY' with a target price of 710,000 KRW, citing the completion of its land, sea, and air defense portfolio. This reflects improved profit margins driven by increased defense exports and a growing order backlog.

Company Analysis

Hanwha Aerospace operates in four major sectors:

• Land Defense: Strong export performance of K9 self-propelled howitzers and Chunmoo multiple rocket launchers
• Aerospace: Selected as the prime contractor for the Nuri rocket program, expanding satellite and space launch vehicle businesses
• Aircraft Engines: Producing KF-21 engines in collaboration with GE
• Future Mobility: Developing urban air mobility (UAM) technology

Recently, Hanwha Aerospace has been integrating its defense subsidiaries and pursuing the acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) to become a comprehensive defense company covering land, sea, and air operations.

Q4 2024 Performance Analysis

Hanwha Aerospace delivered exceptional results in Q4 2024:

• Revenue: 4.8311 trillion KRW (+56% YoY)
• Operating Profit: 892.5 billion KRW (+222% YoY)

Operating profit exceeded market expectations by approximately 68%, mainly driven by strong performance in the land defense sector. Notably, defense export margins reached the high 30% range, significantly contributing to profit growth.

2024 & 2025 Financial Outlook

• 2024 Full-Year Forecast:
  • Revenue: 11.246 trillion KRW
  • Operating Profit: 1.725 trillion KRW
• 2025 Forecast:
  • Revenue: 14.127 trillion KRW
  • Operating Profit: 2.215 trillion KRW

Stock Chart Analysis: Reaching All-Time Highs

Hanwha Aerospace’s stock has been on a strong upward trend, recently hitting an all-time high. The current stock price is 629,000 KRW (+13.86% in the last 24 hours), surpassing the previous 52-week high of 590,000 KRW. After nearly a decade of decline since peaking at 120,000 KRW in September 2010, the stock has reversed its trend. Investors are showing heightened interest due to robust defense exports and growing expectations for the aerospace sector.

Future Outlook: Sustained Growth Expected

Hanwha Aerospace continues to show strong financial performance, driven by rising defense exports and aerospace expansion. The completion of the DSME acquisition and advancements in the UAM business will be key factors influencing the company’s future valuation.