Hanwha Systems (272210) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Hanwha Systems is centered on a defense segment (about two-thirds of 2025 revenue) that makes radar and avionics for warships and aircraft, complemented by an ICT segment (about 18%) that handles group IT as a steady cash cow, while urban air mobility and satellite communications are still at the investment stage. More recently, results from the U.S. Philly Shipyard have been consolidated, bringing shipbuilding — a highly volatile business — onto the same books. April's preliminary results confirmed +37% defense operating profit and a ₩12.2 trillion order backlog, but a one-off loss at Philly Shipyard also produced a net loss of ₩95.8 billion; the company has pledged average annual revenue growth of 16%+ and an ROE of 10%+ through 2030, plus a minimum dividend of ₩350 per share for 2025-2027. Its strengths are a defense core growing on Cheongung-II exports and KF-21 mass production, a ₩12.2 trillion backlog, and a low P/B of 2.56x versus peers; the cautions are that consolidating shipbuilding increases net-profit volatility and that a 213% debt-to-equity ratio leaves limited financial headroom.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Defense & Aerospace” (Shipbuilding, Machinery, Defense & Power Equipment), a type typically read first through forward P/E.
Defense and aerospace carry long order backlogs and multi-year program execution, which makes the direction of future results relatively visible. Since booked orders feed into earnings ahead, forward price-to-earnings (P/E on expected profit) is the first lens rather than trailing results.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 89.8%).
- Revenue rose 30.7% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 17.0% higher than a year earlier.
- ROE is 5.0% (controlling-interest basis). It is below the sector average.
- Operating margin is 3.2%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder Hanwha Aerospace 46.73% (corporate)
Controlling bloc incl. related parties 59.53%
With the controlling bloc holding 60%, control is very secure but the free float is thin.
🔎 In-depth analysis Reading
Hanwha Systems earns money along three broad lines. The first and core one, the defense segment, accounts for about two-thirds of 2025 revenue: it makes radar and avionics for warships and aircraft and supplies them to the Defense Acquisition Program Administration and to overseas governments. Flagship products are the multifunction radar (MFR) for the Cheongung-II and the AESA (active electronically scanned array) radar for the KF-21 fighter. The second, the ICT segment (about 18% of revenue), designs, builds and operates the IT systems of group affiliates as a steady cash cow. The third, new businesses (urban air mobility and satellite communications), is still at the investment stage. On top of this, results from the U.S. Philly Shipyard (HPSI) have recently been consolidated, so alongside the core defense and ICT businesses, shipbuilding — a highly volatile business — now also appears on the financial statements.
The latest close is ₩70,100 and the market capitalization is ₩13.2 trillion. The price sits above its 20-day moving average (₩64,450) and below its 60-day moving average (₩83,815). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 50.7, a neutral level. The one-month change is -0.4%, the three-month change is -42.6%, and the position relative to the 52-week high is -56.9%. Relative strength versus the KOSPI is 29 (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 28% of all stocks. Over the past three months it lagged the index by 28.5%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
The P/E ratio (how many times one year's profit the share price is) currently shows 51.3x and the P/B (how many times book equity) 2.56x. The trap here is trailing (last-year confirmed) earnings. 2025 net profit was ₩242.2 billion, down 46.7% from the prior year, weighed down by the integration of Philly Shipyard and new-business investment. In other words, the 51.3x P/E is a value divided by 'depressed earnings,' so it looks pricier than it really is. The ROE (how much is earned in a year on equity) is a low 5.0%, also held down for the same reason (one-off and investment burdens). On the balance sheet, the debt-to-equity ratio is a somewhat high 213%, and the current ratio of 87.8% means cashable assets are tight relative to debts due within a year. Net debt (total borrowings minus cash) is about ₩1.1 trillion. Conversely, a point worth noting is that the P/B of 2.56x is low versus defense peers (4.9-11.7x).
Revenue keeps growing. Five-year revenue rose from ₩2.09 trillion to ₩3.66 trillion, growth of around 15% a year, and 2025 actually accelerated to +30.7%. The problem is the earnings trajectory. Operating and net profit peaked in 2024 (₩219.3 billion and ₩454.3 billion respectively) and then fell sharply in 2025 — not because the business worsened, but because the Philly Shipyard integration and new-business investment ate into profits. Breaking down Q1 2026 makes this structure clear. Defense actually improved, with revenue of ₩471.2 billion (+9.5%) and operating profit of ₩69.0 billion (+37.2%, a 14.6% operating margin), and ICT grew both revenue and profit by more than 20%. The net loss of ₩95.8 billion resulted from Philly Shipyard posting a ₩46.6 billion operating loss after operations were temporarily halted by heavy snow in the northeastern U.S. in January-February 2026, compounded by the effect of investment-asset valuation. The nature of this loss is closer to one-off than recurring. The company has stated it will grow 2026 defense revenue by the mid-20% range year on year through export expansion, and the order backlog is at a record ₩12.2 trillion. So this year's earnings hinge on how much the core defense and ICT growth and a second-half shipbuilding normalization offset the first-half one-off shipbuilding loss; looking at the core business alone, the earnings direction points up.
On April 20, 2026, through a corporate-value-up plan (voluntary disclosure), the company kept its target of average annual revenue growth of 16%+ and an ROE of 10%+ through 2030 and pledged a minimum dividend of ₩350 per share for 2025-2027. A single sales/supply contract was also disclosed the same day. In the April 27 preliminary-results disclosure, defense growth (operating profit +37%) and a ₩12.2 trillion order backlog were confirmed, but a one-off loss at Philly Shipyard also surfaced a net loss of ₩95.8 billion, becoming a direct trigger for the share-price correction. In May, corrections to the quarterly and business reports and an investor-briefing (IR) notice followed.
The strengths are clear. The core defense business is growing operating profit at a double-digit pace on Cheongung-II exports and KF-21 mass production; a ₩12.2 trillion order backlog effectively books several years of future revenue; and the P/B, at 2.56x, is conspicuously low versus defense peers (4.9-11.7x). The company's formalizing of a 10% ROE target and a dividend floor also shows direction. The caution, conversely, is net-profit volatility. With shipbuilding via Philly Shipyard now consolidated, net profit can swing sharply on external variables like heavy snow, and a 213% debt-to-equity ratio and an 87.8% current ratio leave financial headroom that is not ample. In sum, the stock is strong in a phase where the earnings direction of the core defense and ICT businesses points up and the one-off shipbuilding loss normalizes, but net-profit metrics can stay depressed if shipbuilding losses become protracted or the recovery of new-business investment is delayed. Reading the recovery in core-business earnings together with the low P/B is closer to this company's real picture than the current high trailing P/E.
🔎 Valuation vs peers Fairly valued
Defense peers (radar, avionics, aerospace). Hanwha Aerospace is centered on ground equipment and engines, LIG Defense & Aerospace on guided weapons, and Korea Aerospace Industries on airframes — the sub-fields differ, but this is a peer set that shares the defense growth cycle.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 38.68x | 5.46x | 17.56% |
| LIG Defense & Aerospace | 60.96x | 10.23x | 20.46% |
| Korea Aerospace Industries | 78.71x | 7.85x | 10.63% |
(a) Position versus peers: among the four defense names, Hanwha Systems has the lowest P/B at 2.56x (peers 4.9-11.7x), and its 5.0% ROE is also the lowest. But the low ROE is depressed by the one-off Philly Shipyard loss and new-business investment, so there is ample room for improvement once the core normalizes. (b) Premium/discount: on a P/B basis it is a clear discount to peers, but with consolidated net profit shaken by shipbuilding volatility, the P/E instead looks burdensome. (c) Trailing limitation: the current 51.3x P/E is divided by depressed 2025 earnings, so it overstates the real valuation. With the defense operating margin rising into the 14% range and the backlog at ₩12.2 trillion, an earnings-recovery path is open on a forward basis, but when shipbuilding losses normalize will govern net-profit metrics — so rather than declaring it 'cheap' or 'expensive,' we see it as within a fair range.
Price history Close · MA20 · MA60
The latest close is ₩70,100 and the market capitalization is ₩13.2 trillion. The price sits above its 20-day moving average (₩64,450) and below its 60-day moving average (₩83,815). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 50.7, a neutral level. The one-month change is -0.4%, the three-month change is -42.6%, and the position relative to the 52-week high is -56.9%. Relative strength versus the KOSPI is 29 (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 28% of all stocks. Over the past three months it lagged the index by 28.5%. 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 -28.54% / 6M -40.68% / 12M -34.60%
Key metrics Computed vs sector median
Valuation
The P/E of 54.67x is above the sector median (46.67x). The P/B of 2.68x is below the sector median (4.89x).
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.
Profitability & financials
Return on equity (ROE) is 5.0%, below the sector average (11.0%). The operating margin is 3.2%. The debt ratio is 116.9%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.7B | $2.0B | $2.6B | +30.69% ↑ faster |
| Operating profit | $86.1M | $154.1M | $84.2M | -45.34% ↓ slower |
| Net profit | $245.3M | $319.1M | $170.2M | -46.68% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.5B | $1.5B | $1.7B | $2.0B | $2.6B |
| Operating profit | $78.7M | $16.9M | $86.1M | $154.1M | $84.2M |
| Net profit | $69.1M | -$53.8M | $245.3M | $319.1M | $170.2M |
| Revenue CAGR | 4-yr avg 15.08% | ||||
Revenue rose 30.7% year over year (2023 ₩2.5 trillion → 2024 ₩2.8 trillion → 2025 ₩3.7 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit fell 45.3% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 15.1%. The two-year revenue CAGR is 22.2%. In the most recent quarter (Q1 2026), revenue was 17.0% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- Revenue grew 30.7% 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
- 2026-04-20UpdateCorporate-value-up plan (voluntary disclosure): keeps the target of average annual revenue growth of 16%+ and an ROE of 10%+ through 2030, and pledges a minimum dividend of ₩350 per share for 2025-2027.The company presents its medium-to-long-term growth, profitability and shareholder-return direction in official figures. Codifying a dividend floor strengthens predictability. Source
- 2026-04-20UpdateDisclosure of a single sales/supply contract (supply of defense products). Part of the trend of a growing order backlog.Strengthens near-term revenue visibility. Confirms the defense export and mass-production pipeline. Source
- 2026-04-27EarningsQ1 2026 preliminary results: consolidated revenue ₩807.1 billion (+17%), operating profit ₩34.3 billion (+1.9%), net loss -₩95.8 billion (swung to a loss). Defense revenue ₩471.2 billion, operating profit ₩69.0 billion (+37%), order backlog ₩12.2 trillion. The net loss stems from a one-off operating loss at the U.S. Philly Shipyard (-₩46.6 billion, operations halted by heavy snow) and the effect of investment-asset valuation.Core (defense and ICT) profit improved, but a one-off shipbuilding loss caused a swing to a net loss. A direct trigger for the sharp fall in the share price. Source
- 2026-05-13FilingQ1 2026 quarterly report and correction to the 2025 business report submitted.Reflects confirmed financial and business-segment data. Confirms a defense revenue share of about 66.6%. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 net loss | -₩95.8 billion(base quarter net_income -95,751,914,040) | -9575,200 | Confirmed | link |
| Q1 2026 consolidated revenue | ₩807.1 billion(base quarter revenue 807,099,186,689) | ₩807.1 billion | Confirmed | link |
| Defense revenue share / 2025 revenue | 2025 revenue 3.66(base fundamentals revenue) | approx. 66.6%·ICT approx. 17.8% | Confirmed | link |
| 2026 net profit (company official outlook) | base | — | Unverified | link |
Recent filings Source
- 2026-05-29Corporate governance report
- 2026-05-29Disclosure
- 2026-05-29Large-business-group status disclosure
- 2026-05-13PeriodicQuarterly report
- 2026-05-13PeriodicAnnual business report (amended)
- 2026-05-08Disclosure
- 2026-05-07Disclosure
- 2026-04-27Disclosure
- 2026-04-27EarningsFair-disclosure notice
- 2026-04-20Single supply/sales contract
- 2026-04-20Disclosure
- 2026-04-20Dividend disclosure
📖 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.