 |
The K9 self-propelled howitzer (photo: Hanwha Aerospace) |
[Alpha Biz= Reporter Kim Sangjin] Meritz Securities stated on November 1 that "the expansion of export items is expected for Hanwha Aerospace in the medium to long term." The firm maintained its "Buy" rating and target price of 460,000 KRW.
Meritz highlighted the importance of Hanwha Aerospace's ammunition business, noting that while large-scale sales from the acquisition of the Chunmoo multiple launch rocket system (MLRS) in India are significant, the steady demand for consumables should not be overlooked.
Earlier, Hanwha Aerospace signed a memorandum of understanding with WB Group, Poland's largest private defense company, for the local production of 80km guided missiles for the Chunmoo system. In the same month, the company also decided to invest 667.3 billion KRW in the production facilities for propellant.
Meritz emphasized that "since Chunmoo has received positive feedback in Poland, the demand for guided missiles is likely to remain steady," and pointed out that propellant is currently in short supply in Europe, which could enhance Hanwha Aerospace's prominence in this area.
The firm further stated that "the ammunition business, with confirmed medium- to long-term demand, will support the downside of performance," helping to stabilize the company's operations and reduce volatility.
In its third-quarter results, Hanwha Aerospace reported a revenue of 2.63 trillion KRW and an operating profit of 477.2 billion KRW, marking increases of 61.9% and 457.7%, respectively, compared to the same period last year. The operating profit significantly surpassed the consensus estimate of 341 billion KRW, with the ground defense segment achieving a remarkable operating profit margin of 26.6%, driving overall performance.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
