"Hanwha Systems Excels in Both Core and New Businesses, Target Price Set at 90,000 Won" [Click eStock]

BNK Securities Resumes Coverage
Issues a "Buy" Recommendation

On August 6, BNK Securities resumed coverage on Hanwha Systems, issuing a "Buy" investment rating and setting a target price of 90,000 won.

Lee Sanghyun, a researcher at BNK Securities, stated, "Given that the company's strong performance in its core business continues and a turnaround is expected in its new businesses, the recent correction in the share price presents a re-entry opportunity."

Lee identified the strengthening of export momentum in Hanwha Systems' main defense business, and the resulting structural improvement in earnings capacity, as key investment points. Leveraging the company's order backlog of 11.3 trillion won, he analyzed that not only the current projects underway in the United Arab Emirates (UAE) but also mass production of Cheongung-II for Saudi Arabia and Iraq, starting next year, will be reflected in results, enabling stable sales for three to four years.

He also positively assessed the expectations for a full-fledged turnaround at Phili Shipyard next year. He explained, "By expanding the existing merchant vessel-focused lineup to include high value-added special ships and defense support vessels—aligned with the modernization programs of the U.S. Navy and Coast Guard (USCG) and an increase in demand for government vessels—synergies are expected to be created."

However, he noted that several variables should be monitored. He explained, "Short-term profit momentum could slow due to increased in-house investment in the second half of the year; there is a potential for a delayed turnaround if normalization of the construction process at Phili Shipyard is delayed; and non-operating profit and loss volatility caused by fluctuations in the stock prices of equity affiliates should be continuously monitored."

This content was produced with the assistance of AI translation services.