Hanwha Aerospace is expected to show an increase in its performance in the second half of the year based on its affiliates in charge of private and defense industries.
Eugene Investment & Securities presented Hanwha Aerospace's target stock price of KRW 58,000 and investment opinion 'buy' on the 28th.
Hanwha Aerospace is an intermediate holding company of Hanwha Group, focusing on the aviation and engine business. Subsidiaries include Hanwha Tech (security), Hanwha Defense (defense), Hanwha Power System (energy equipment), Hanwha Precision Machinery (industrial equipment), and Hanwha System (defense and ICT service).
In the first quarter, Hanwha Aerospace earned KRW 1.2124 trillion in consolidated sales and KRW 65.9 billion in operating profit. Sales increased 18.0% and operating profit surged 1946.6% from the same period last year.
Growth in the defense sector was also expected in the second half. The Ministry of National Defense of South Korea will increase the cost of defense improvement from 17.1 trillion won per year in 2021 to 23.6 trillion won per year in 2025.
It is also known that it has set up a localization policy to invest more than 80% of its defense improvement costs in domestic weapons.
As a result, Hanwha Defense's domestic sector is expected to benefit. Hanwha Aerospace is expected to generate 5.8988 trillion won in consolidated sales and 292.2 billion won in operating profit in 2021. Compared to 2020 performance, sales are up 10.8% and operating profit is up 19.8%.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
