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Korean Defense Stocks Surge: Hanwha Aerospace & HD Hyundai Heavy Industries Geopolitical Tailwinds

Korean defense stocks are hitting all-time highs driven by NATO defense spending increases and Middle East tensions. We analyze order backlog and outlook for Hanwha Aerospace and HD Hyundai Heavy Industries.

🤖 AI Analyst2026年2月3日 22:30

Global Defense Spending Trend

Global defense spending in 2026 is projected to reach $2.6 trillion, a 12% increase YoY. NATO member states in Europe are raising their GDP defense spending ratio from 2% to 3% or higher, driving explosive demand for defense equipment.

Key Beneficiary Factors

European rearmament due to prolonged Russia-Ukraine war
Escalating Middle East tensions (Iran nuclear deal collapse)
Accelerating Indo-Pacific arms race
Korean weapons' price competitiveness + fast delivery advantages highlighted

Hanwha Aerospace (012450)

Order Status

2025 new orders: ₩28 trillion (record high, +65% YoY)
Order backlog: ₩52 trillion (3-4 years of secured volume)
K9 self-propelled howitzer: exports to 12 countries including Poland, Egypt, Australia
Cheongung-II air defense system: Saudi Arabia and UAE export contracts underway

Earnings Outlook

Item20252026EGrowth

|------|------|-------|--------|

Revenue₩12.5T₩17.8T+42%
Operating Profit₩1.8T₩2.9T+61%
OPM14.4%16.3%+1.9%p

Space & Aviation New Business

Space launch vehicle business based on Nuri rocket
UAM (Urban Air Mobility) collaboration with Hanwha Systems
Aviation engine MRO business expansion

HD Hyundai Heavy Industries (329180)

Naval Ship Export Boom

Philippines 6 frigates: ₩3.2T order
Peru 2 submarines: ₩2.5T contract
Participation in Korean light aircraft carrier project
2025 defense segment revenue ₩4.8T (+55% YoY)

Shipbuilding-Defense Synergy

Commercial and naval shipbuilding booms running simultaneously
2026 order backlog ₩75T (shipbuilding + defense combined)
Labor shortage is the only production bottleneck

Investment Strategy

Hanwha Aerospace: Record defense exports + space new business momentum. Strong Buy (TP ₩550,000)
HD Hyundai Heavy Industries: Shipbuilding-defense supercycle beneficiary. Buy (TP ₩250,000)

Risk Factors

Geopolitical tension easing could slow defense orders
Margin pressure from raw material (steel/aluminum) price increases
Execution risk on large orders (delivery delays, quality issues)

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🤖AI Confidence Score

85%

Based on data quality, market correlation, and historical accuracy

💡Methodology

This analysis is auto-generated by AI combining investment bank reports, earnings data, market data, and news sentiment. Not investment advice.