Shares of Hanwha Techwin Co., a defense arm of South Korean large conglomerate Hanwha Group, has gained more than 10 percent during the last 31 trading days, buoyed by insatiable appetite from offshore investors betting on the company’s defense and aero-engine businesses, analysts said.

According to South Korea’s securities exchange operator Korea Exchange (KRX) on Sunday, foreigners have net purchased the company’s shares worth 133.1 billion won ($120 million) from July 28 to September 9. The foreign buying spree helped the company’s share price spike 11.9 percent during the cited period.

Market analysts said the foreign buying spree has been driven by rosy outlook for the growth potential of the company’s defense and the aero-engine sectors. Hanwha Techwin’s defense division has the upper hand in the local defense market with its K-9 self-propelled artillery. Moreover its exports to Poland, India and turkey have picked up. The company has also secured a future growth momentum after it recently won a deal to develop indigenous engine components for the Korean fighter experimental (KF-X) aircrafts. Market analysts expected that the company would post operating profits this year, swinging from operating losses last year.

The only negative factor that would weigh on its shares would be the rapid rise in its share price that has surged more than 70 percent so far this year. Lee Ji-yoon, an analyst of Daeshin Securities Co. recommended purchasing Hanwha Techwin stocks and keeping them for the long term, citing the growth potential of the company’s aero-engine business that is still in the fledgling stages. Park Won-jae, an analyst from Mirae Asset Daewoo Co., predicted the company’s shares to take a breather after its recent bull run, but still saw more room to rise on expected synergies from businesses of Hanwha Techwin, Hanwha Defense Systems Corp. and Hanwha Thales Co. starting next year.

Hanwha Techwin Shares fell 1 percent, or 600 won, to 59,600 won as of 2:59 p.m. on Monday.

By Chae Jong-won

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