Corporate Logo(source: hanwhaaerospace.com)
Korea Investment & Securities Co.,Ltd stated that Hanwha Aerospace (012450) has confirmed a bottom in quarterly performance and is expected to sustain strong export momentum across the Middle East, Asia, and Europe. The firm maintained its target price of 1.3 million won and reaffirmed the company as its “Top Pick” in the defense sector.
On May 2, analyst Jang Nam-hyun explained, “On a consolidated basis, Hanwha Aerospace posted first-quarter revenue of 5.4842 trillion won, up 278.4% year-on-year, and operating profit of 560.8 billion won, marking a return to profitability. Revenue and profit beat market consensus by 14.3% and 11.7%, respectively.” However, he noted that, “The market’s reaction was subdued, as expectations had already been raised by the earlier earnings surprises from Hanwha Ocean and Hanwha Systems, the company’s consolidated subsidiaries.”
Jang identified two notable aspects of the first-quarter results. “First, the land defense division continues to deliver high profitability,” he said. “The segment reported an operating margin of 26.1%, exceeding our estimate of 21.1%. Despite seasonal factors and the absence of export-related mass production revenue outside the Poland project, the high profitability of the Polish export program supported strong margins.”
He added, “Second, the company recorded 61.5 billion won in other operating losses due to amortization expenses from purchase price allocation (PPA). As this is not a one-off item, we will incorporate the PPA amortization into future earnings forecasts.”
Despite factoring in the additional amortization, Jang explained that the 2025 operating profit forecast has been revised up by 4.1%, citing upward adjustments to the earnings outlooks for subsidiaries Hanwha Ocean and Hanwha Systems.
He also noted, “The land defense segment delivered solid operating profit in the first quarter despite seasonality. We expect earnings to improve quarter-on-quarter through the rest of the year, with 2025 land defense operating profit projected at 1.9417 trillion won, up 24% from the previous year.”
Looking ahead, Jang said, “Export momentum is expected to continue in the Middle East, Asia, and Europe. In particular, Hanwha Aerospace has signed an agreement with Poland’s WB Group to establish a joint venture for local production of the Cheonmu missile system, setting the stage for a formal export contract within the year.”
*[KOSPI]Hanwha Aerospace(012450) engages in the production and sales of aircraft, gas turbine engines, artillery systems, and armored vehicles domestically and internationally. Market capitalization is 36.33 trillion won(as of April 30, 2025, closing price).
Corporate Logo(source: hanwhaaerospace.com)
Korea Investment & Securities Co.,Ltd stated that Hanwha Aerospace (012450) has confirmed a bottom in quarterly performance and is expected to sustain strong export momentum across the Middle East, Asia, and Europe. The firm maintained its target price of 1.3 million won and reaffirmed the company as its “Top Pick” in the defense sector.
On May 2, analyst Jang Nam-hyun explained, “On a consolidated basis, Hanwha Aerospace posted first-quarter revenue of 5.4842 trillion won, up 278.4% year-on-year, and operating profit of 560.8 billion won, marking a return to profitability. Revenue and profit beat market consensus by 14.3% and 11.7%, respectively.” However, he noted that, “The market’s reaction was subdued, as expectations had already been raised by the earlier earnings surprises from Hanwha Ocean and Hanwha Systems, the company’s consolidated subsidiaries.”
Jang identified two notable aspects of the first-quarter results. “First, the land defense division continues to deliver high profitability,” he said. “The segment reported an operating margin of 26.1%, exceeding our estimate of 21.1%. Despite seasonal factors and the absence of export-related mass production revenue outside the Poland project, the high profitability of the Polish export program supported strong margins.”
He added, “Second, the company recorded 61.5 billion won in other operating losses due to amortization expenses from purchase price allocation (PPA). As this is not a one-off item, we will incorporate the PPA amortization into future earnings forecasts.”
Despite factoring in the additional amortization, Jang explained that the 2025 operating profit forecast has been revised up by 4.1%, citing upward adjustments to the earnings outlooks for subsidiaries Hanwha Ocean and Hanwha Systems.
He also noted, “The land defense segment delivered solid operating profit in the first quarter despite seasonality. We expect earnings to improve quarter-on-quarter through the rest of the year, with 2025 land defense operating profit projected at 1.9417 trillion won, up 24% from the previous year.”
Looking ahead, Jang said, “Export momentum is expected to continue in the Middle East, Asia, and Europe. In particular, Hanwha Aerospace has signed an agreement with Poland’s WB Group to establish a joint venture for local production of the Cheonmu missile system, setting the stage for a formal export contract within the year.”
*[KOSPI]Hanwha Aerospace(012450) engages in the production and sales of aircraft, gas turbine engines, artillery systems, and armored vehicles domestically and internationally. Market capitalization is 36.33 trillion won(as of April 30, 2025, closing price).