Hanwha Aerospace Soars: Defense Industry Darling Defies Staff Split Concerns, Target Price Takes Flight

Hanwha Aerospace’s Growth Potential Remains Strong

Korea Investment & Securities has maintained its buy opinion on Hanwha Aerospace, raising its target stock price to 380,000 won. The defense industry’s growth potential is expected to remain unchanged despite the spin-off.

Trading in Hanwha Aerospace, which was suspended for a month due to the spin-off, will resume today. The market capitalization before the trading suspension was 14.7 trillion won, and the split ratio was 9 to 1. Considering this, Hanwha Aerospace’s standard price is equivalent to 290,000 won.

Jang Nam-hyeon, a researcher at Korea Investment and Securities, explained that the reason for the increase in the stock price before the split was the potential for growth in the ground defense division, which will not change even after the split. Performance and order backlog are likely to increase.

Korea Investment and Securities predicts that Hanwha Aerospace’s share of overseas sales in the ground defense industry will be 5.6% in 2026, an increase of 22.8 percentage points over 2023. Accordingly, the operating profit margin is expected to increase by 4% over the same period.

Researcher Jang added that after the local production of K9 and Redback power packs is completed in 2025, exports to the Middle East will expand. This will provide access to the 1 trillion won artillery market and the 19 trillion won armored vehicle market.

The researcher also stated that the appropriate corporate value of Hanwha Aerospace before the demerger is KRW 18.9 trillion, and the appropriate corporate value after the demerger is KRW 17.4 trillion. This is a 2.7% increase from before the split.

He concluded that the defense sector drives existing corporate value growth, and investment attractiveness will be maintained regardless of the spin-off of non-defense subsidiaries. There is a high probability that the share price will increase by 31% over the base price.