"Hanwha Aerospace Wins U.S. Army Contract, Target Price Raised" [Click e-Stock]

DS Investment & Securities Raises Target Price for Hanwha Aerospace

From 16.7 Million Won to 18.3 Million Won

On August 25, DS Investment & Securities maintained its "Buy" recommendation on Hanwha Aerospace and raised its target price from 16.7 million won to 18.3 million won.

Kang Taeho, an analyst at DS Investment & Securities, cited several reasons for the upward revision. He pointed to Hanwha Aerospace's demonstrated competitiveness through winning orders in competition with numerous global land defense companies, as well as the company's potential to secure market share in the new segment of wheeled self-propelled howitzers, following its already dominant global share in the tracked self-propelled howitzer market.

On August 18 (local time), the U.S. Army announced that it had signed a contract with Hanwha Defense USA, the American subsidiary of Hanwha Aerospace, for prototype development in the Mobile Tactical Cannon (MTC) program. The order includes an initial batch of six prototypes, with an option to order 12 additional units over the next four years. The total contract value is approximately $260 million (371.5 billion won), amounting to about 20.6 billion won per unit.

Analyst Kang highlighted the significance of this contract, noting that a completed weapons system made in Korea has entered the testing and evaluation phase of the world's largest defense market—the United States. Additionally, separate from the MTC program, the U.S. government has signed a joint research and development agreement to integrate the 155mm 58-caliber gun, which it designed, into the K9 platform. He commented, "If this R&D effort is successfully completed, the U.S. may also consider replacing its current M109 self-propelled howitzer with the K9A2."

He added, "This contract serves as a strategic foothold for Hanwha Aerospace, starting with the K9MH and extending into ammunition supply systems, propellant charges, maintenance, repair, and overhaul (MRO), long-range barrels, and tracked self-propelled howitzers, allowing the company to expand its business scope across the entire U.S. artillery system sector." Kang maintained Hanwha Aerospace as the top pick within the industry.

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