Hanwha Aerospace makes and sells ground defense equipment such as the K9 self-propelled howitzer and the Chunmoo multiple-launch rocket system, along with gas-turbine aircraft engines. Riding rearmament demand in Europe, especially Poland, it had built an order backlog of roughly ₩37 trillion as of the end of last year, and 2025 revenue rose 137% year on year to ₩26.7 trillion. What stands out lately is that while European defense demand continues and Polish K9 and Chunmoo volumes are booked as actual revenue, profit rises quickly; that said, deliveries are concentrated in the second half, so quarterly results swing widely, and the high debt ratio is worth examining alongside.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 557.1%).
- Revenue rose 137.6% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 4.9% higher than a year earlier.
- ROE is 14.5% (controlling-interest basis). It is below the sector average.
- Operating margin is 11.6%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Hanwha 32.18% (corporate)
Controlling bloc incl. related parties 35.55%
With the controlling bloc holding 36%, the ownership structure is stable.
🔎 In-depth analysis
- This company earns money by making weapons and engines.
- Its biggest pillar is ground defense.
- The K9 self-propelled howitzer and the Chunmoo multiple-launch rocket system are its signature products, exported to countries including Poland, Australia and the Middle East.
- Its second pillar is aerospace: it handles gas-turbine engines and engine parts for fighter jets and helicopters, as well as engine maintenance, holding a virtually monopolistic position in Korea's military-engine market.
- On top of this it has space businesses such as satellites and launch vehicles, and — through subsidiaries — shipbuilding and energy operations, making it a diversified defense-and-engine company rooted in defense.
- The main stream of revenue comes from long-term supply contracts with governments and overseas military authorities, so a single order is recognized as revenue spread over several years.
- The latest close is ₩953,000 and market capitalization is ₩49.1 trillion.
- The price sits below its 20-day moving average (₩1,096,200) and below its 60-day line (₩1,228,233).
- It trades under both the short- and mid-term averages, so the trend is on the soft side.
- The RSI (a gauge that scores the strength of gains versus losses over the past 14 days on a 0–100 scale) is 36.1, a neutral level.
- The price is down 7.6% over one month, down 38.0% over three months, and sits 38.0% below its 52-week high.
- Relative strength against the KOSPI is 33 (on a 1–99 scale that weights recent returns versus the index over the past year more heavily; higher means stronger than the market).
- That places it near the top 67% of all stocks by strength.
- Over the past three months it lagged the index by 48.3%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- Profitability is on the good side.
- ROE (how much the company earns in a year on its equity) is 14.5% and the operating margin is 11.6%.
- When looking at valuation metrics, one should first understand the limits of last year's figures.
- The P/E ratio (how many times one year's earnings the price represents) is 34.98x, which looks high, but that is because 2025 net profit (₩1.40 trillion) was depressed by a base effect as a one-off gain from 2024 dropped out.
- The debt ratio (borrowings relative to equity) comes in high at 557%.
- However, in defense, advance payments and contract liabilities received on order are largely recorded as accounting debt — an industry trait — so it is hard to treat this as dangerous by the standards of ordinary manufacturing.
- That said, an interest coverage ratio of 1.94x is on the low side, so the interest burden is worth watching too.
- On debt-inclusive metrics, EV/EBIT (enterprise value divided by operating profit — a debt-adjusted counterpart to P/E) is 20.3x and EV/Sales (enterprise value divided by revenue) is 2.35x.
- Net debt (total borrowings less cash) is about ₩5.1 trillion, and the free-cash-flow yield (actual cash generated relative to market cap) is 3.6%.
- The scale of growth is large.
- Revenue rose 137.6% year on year to ₩26.7 trillion in 2025, the result of European defense-export volumes beginning to be booked as revenue in earnest.
- Operating profit also grew 78% to ₩3.09 trillion.
- Net profit, by contrast, fell 37.8% year on year to ₩1.40 trillion — but this is due to a base effect as a one-off gain from 2024 dropped out, not because the business worsened.
- Indeed, first-quarter 2026 net profit rose 187.8% year on year, showing that the profit recovery has already begun.
- The company is maintaining plans to deliver more than 30 K9 howitzers and more than 40 Chunmoo units this year, and an order backlog of roughly ₩37 trillion as of the end of last year underpins more than four years of work.
- Because deliveries are concentrated in the second half, this year's profit is weighted toward the second half rather than the first.
- Reflecting this trajectory, we see this year's net profit growing sharply over last year's.
- So while last year's P/E looks high, on this year's expected earnings the actual valuation is far lower.
- Recent disclosures show the company in an expansion phase.
- On May 27 a new facility-investment disclosure laid out plans to expand production capacity — investment to keep pace with rising export volumes.
- On May 7 it disclosed an investor briefing, sharing results and outlook with investors.
- Its May 13 quarterly report finalized first-quarter 2026 results: revenue of ₩5.75 trillion, operating profit of ₩638.9 billion, and net profit up sharply year on year, confirming a profit-recovery trend.
- Meanwhile, on June 2 there was a disclosure of a production halt and a serious industrial accident.
- Safety and production risks can lead to operational disruption in defense manufacturing, so this is worth noting.
- On June 10 there was a clarification disclosure in response to a rumor or media report.
- The core of this stock is the structural demand of European rearmament and the delivery capability that turns it into actual revenue.
- The strong conditions are clear.
- An order backlog of roughly ₩37 trillion has reserved several years of revenue.
- Polish K9 and Chunmoo volumes are booked as revenue and profit in earnest from the second half.
- Because last year's net profit was depressed by a base effect, this year's profit-growth rate is likely to show up large.
- So while last year's P/E looks high, on this year's expected earnings it is valued lower than peer defense companies.
- There are cautions too.
- Deliveries are concentrated in the second half, so quarterly results swing widely.
- The debt ratio and interest burden are high, so a worsening rate or funding environment increases the strain.
- Export contracts hinge on the political and budget circumstances of the counterparty country, so schedule-delay risk is ever-present.
- In short, while European defense demand and deliveries proceed as planned, profit growth justifies the valuation; but if deliveries are delayed or order momentum slows, earnings volatility can be reflected directly in the share price.
🔎 Valuation vs peers Undervalued
Compared against leading domestic defense companies that make ground-defense and aerospace/defense equipment — the group closest in business substance (weapon systems, engines, export contracts).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Korea Aerospace Industries | 78.66x | 7.99x | 10.16% |
| LIG Defense & Aerospace | 60.26x | 10.68x | 17.72% |
| Hyundai Rotem | 22.77x | 5.69x | 25.01% |
Looking only at last year's (2025) P/E of 38.2x, it looks expensive. But that net profit was depressed by a base effect as a one-off gain from 2024 dropped out. In a phase where earnings change dramatically, last year's metric distorts the actual valuation. Reflecting this year's expected earnings, the company's P/E falls to the low-20x range, well below Korea Aerospace Industries (74.5x) or LIG Defense & Aerospace (62.0x). Placing growth rate and order backlog side by side, we judge it as being at a discount to leading defense companies. That said, it is similar to Hyundai Rotem (24.0x), and the high debt ratio and the concentration of deliveries carry the condition that second-half deliveries must proceed as planned to support this valuation.
Price history Close · MA20 · MA60
The latest close is ₩953,000 and the market capitalization is ₩49.1 trillion. The price sits below its 20-day moving average (₩1,096,200) and below its 60-day moving average (₩1,228,233). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 36.1, a neutral level. The one-month change is -7.6%, the three-month change is -38.0%, and the position relative to the 52-week high is -38.0%. Relative strength versus the KOSPI is 33 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 33% of all stocks. Over the past three months it lagged the index by 48.3%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -48.28% / 6M -42.13% / 12M -50.15%
Key metrics vs sector median
Valuation
The P/E of 34.98x is below the sector median (50.46x). The P/B of 5.07x is in line with the sector median (5.69x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.676x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 14.5%, in line with the sector average (15.0%). The operating margin is 11.6%. The debt ratio is 557.1%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $5.2B | $7.4B | $17.7B | +137.57% ↑ faster |
| Operating profit | $393.9M | $1.1B | $2.0B | +78.38% ↓ slower |
| Net profit | $490.0M | $1.5B | $931.2M | -37.85% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.7B | $4.3B | $5.2B | $7.4B | $17.7B |
| Operating profit | $183.7M | $250.0M | $393.9M | $1.1B | $2.0B |
| Net profit | $167.4M | $133.1M | $490.0M | $1.5B | $931.2M |
| Revenue CAGR | 4-yr avg 48.16% | ||||
Revenue rose 137.6% year over year (2023 ₩7.9 trillion → 2024 ₩11.2 trillion → 2025 ₩26.7 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit rose 78.4% year over year. The pace of that profit growth is gradually easing. Over the 5 years on record, revenue compound annual growth (CAGR) is 48.2%. The two-year revenue CAGR is 84.0%. In the most recent quarter (Q1 2026), revenue was 4.9% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- ROE of 14.5% points to solid profitability.
- Revenue grew 137.6% year over year, a sign of growth.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-05-27FilingDisclosure of a new facility investment. A capacity-expansion investment to meet growing export volumes.A growth investment that mid term increases delivery capacity and capacity to recognize revenue. Upfront it carries investment costs, then improves the pace of clearing orders as capacity expands. Source
- 2026-05-13EarningsQ1 2026 quarterly report. Revenue of ₩5.75 trillion, operating profit of ₩638.9 billion, and net profit up sharply year on year.Near term, it confirms a profit-recovery trend. However, with Polish deliveries concentrated in the second half, first-half results are relatively light (a back-half-weighted structure). Source
- 2026-05-07IRDisclosure of an investor briefing. Explaining results and business outlook to investors.Mid term, a communication event sharing the company's delivery plans and the pace of clearing its order backlog with the market. Source
- 2026-06-02UpdateDisclosure of a production halt and a serious industrial accident. A safety and operations matter.Near term, a possible operational disruption on the affected line. Given the nature of defense manufacturing, the impact on delivery schedules is worth watching. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 revenue and operating profit | revenue ₩5.75 trillion, operating profit ₩638.9 billion | revenue 5₩751.0 billion, operating profit ₩638.9 billion | Confirmed | link |
| 2025 full-year revenue | ₩26.7 trillion | ₩26.7 trillion | Confirmed | link |
| 2026 expected net profit (forward) | approx. ₩2.35 trillion(self-estimate) | — | Unverified | link |
Recent filings
- 2026-06-10Disclosure
- 2026-06-09OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-04Disclosure
- 2026-06-02Disclosure
- 2026-06-02Disclosure
- 2026-05-29Corporate governance report
- 2026-05-29Large-business-group status disclosure
- 2026-05-27Amended filing
- 2026-05-13PeriodicQuarterly report
- 2026-05-12Disclosure
- 2026-05-07Disclosure
- 2026-05-07Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.