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Shinhan Securities increases Hanwha AeroSpace price target

Collected: 2023.12.18

Distributed: 2023.12.19

Source: Go Direct

Redback [Courtesy of Hanwha AeroSpace]

South Korea’s Shinhan Securities Co. on Monday raised its price target for the nation’s leading aerospace company Hanwha AeroSpace Co. to 150,000 won ($115.40) from 132,000 won, citing the company’s stable business portfolio and growth potential.

Shinhan Securities analyst Lee Dong-heon said in a stock report on Monday that the upgraded price target was calculated by applying the target price-to-earnings ratio (PBR) of 1.91 times to 2024’s estimated book-value per share (BPS).

“Hanwha AeroSpace has a relatively strong export history, product dominance, and stability among defense companies,” Lee said. “Although export margins are less predictable, the company is likely to maintain higher margins than other companies.”

“The company continues to make proactive investments in the space business via its subsidiary Hanwha Systems Co.,” he added, noting the mid to long-term growth potential coming from the business expansion.

Hanwha AeroSpace recently won a series of overseas orders, including a second-phase contract for K9 self-propelled howitzers in Poland and a contract for Land 400 in Australia.

“The company’s defense order backlog is estimated at around 26 trillion won by the end of 2023,” Lee said. “Earnings will improve rapidly in the fourth quarter as the impact of K9 howitzers and Chunmoo launchers to Poland kicks in, and quarterly earnings will stabilize in 2024 as export volatility decreases.”

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