Hanwha Aerospace Set for Stronger H2 Earnings, Orders: Korea Investment Keeps 2M Won Target

Korea Investment & Securities has reiterated its upbeat stance on Hanwha Aerospace, forecasting improved earnings and a wave of new orders in the second half of the year while maintaining a buy rating and a target price of 2 million won. The shares were trading around 949,000 won on the afternoon of July 15, roughly half the brokerage's target.

Analyst Jang Nam-hyun said the defense group's results and order intake are passing a trough and are poised to recover, adding that a strong pipeline of export references combined with an aggressive localization strategy is lifting the odds of fresh contracts.

The brokerage expects overseas programs in Poland, Egypt and Australia to drive revenue recognition higher, projecting a 51% year-on-year jump in second-half operating profit from the ground-defense business. It also flagged potential new deals, including a self-propelled howitzer order in Spain and talks over a third batch of K9 howitzers for Poland.

Jang pointed to a possible restart of talks with Saudi Arabia's defense ministry, estimating a contract worth more than 10 trillion won, along with a July selection as preferred bidder for a U.S. self-propelled howitzer modernization program and the prospect of expanded L-SAM long-range missile exports to the United Arab Emirates.

For the second quarter, Korea Investment projects consolidated revenue of about 8.1 trillion won, up 28.4% from a year earlier, with operating profit of 956.2 billion won, a 10.6% rise. That would fall short of the market consensus of roughly 1.02 trillion won, as more deliveries are expected to be concentrated in the second half.

Beyond the near-term numbers, the brokerage argued Hanwha Aerospace has secured a foundation for medium-term growth. With a ground-defense backlog of 38.2 trillion won, it estimated a compound annual earnings-per-share growth rate of 37.7% for 2025 through 2028, supported by continued investment in overseas production bases across Europe and the Middle East and the recruitment of local partners.