Hanwha Systems is centered on a defense segment that makes radars and avionics for ships and aircraft (about two-thirds of 2025 revenue), with an ICT segment that runs the group's IT systems (about 18%) serving as a steady cash cow, while its urban air mobility and satellite-communications businesses are still in the investment stage; recently the results of the U.S. Philly Shipyard have been consolidated, bringing shipbuilding, a high-volatility business, into the mix. April preliminary results confirmed defense operating profit up 37% and an order backlog of ₩12.2 trillion, but a one-off loss at Philly Shipyard also surfaced as a net loss of ₩95.8 billion, and the company set targets of at least 16% average annual revenue growth and 10%+ ROE through 2030 while pledging a minimum ₩350 dividend per share for 2025-2027. The strengths are a defense core growing on Cheongung-II exports and KF-21 mass production, a ₩12.2 trillion backlog, and a P/B of 2.84x that is low versus peers. The cautions are that shipbuilding consolidation raises net-profit volatility and that a 213% debt ratio leaves limited financial slack.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 213.0%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 87.8%).
- 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 3.3%.
- P/B is low versus peers too, so it looks cheap on an asset basis as well.
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
- Hanwha Systems makes money on three broad legs.
- The first and core is the defense segment, which made up about two-thirds of 2025 revenue and produces radars and avionics for ships and aircraft, delivering to the Defense Acquisition Program Administration and foreign governments.
- Its flagship products are the Multi-Function Radar (MFR) for 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 in the investment stage.
- On top of these, the results of the U.S.
- Philly Shipyard (HPSI) have recently been consolidated, so beyond the defense and ICT core, shipbuilding — a high-volatility business — now sits in the financial statements as well.
- The latest close is ₩64,700 and the market cap is ₩12.2 trillion.
- The price sits below its 20-day line (₩82,950) and its 60-day line (₩103,182).
- Trading below both its short- and medium-term moving averages, the trend is on the soft side.
- The RSI (a gauge that weighs 14 days of gains against losses on a 0-100 scale) is 32.0, a neutral level.
- The stock is down 29.4% over one month and 50.9% over three months, and stands 60.2% below its 52-week high.
- Relative strength versus the KOSPI is 54 (1-99, a return-versus-index measure over the past year weighted toward recent performance; higher means stronger than the market), placing it in roughly the top 46% of all stocks by strength.
- Over the past three months it lagged the index by 60.1%.
- Chart reading is best done alongside trading volume and the dates of disclosures.
- The P/E shown now (how many times one year of earnings the price reflects) is 50.46x and the P/B (how many times book net assets) is 2.52x.
- The trap here is the trailing (last-year finalized) earnings.
- Net profit in 2025 was ₩242.2 billion, down 46.7% from the prior year, weighed down by Philly Shipyard integration and new-business investment, so profit is depressed.
- In other words, the P/E of 56.9x is a value divided by 'depressed profit,' making it look more expensive than it is.
- The profitability metric ROE (how much it earns on equity in a year) is a low 5.0%, and it too is depressed for the same reason (one-off items and investment burden).
- On the balance sheet, the debt ratio (debt against equity) is somewhat high at 213%, and the current ratio of 87.8% means assets convertible to cash are tight against debt due within a year.
- On the other side, a point worth noting is that the P/B of 2.84x is low versus defense peers.
- Revenue keeps growing.
- Over five years it went from ₩2.09 trillion to ₩3.66 trillion, about 15% average annual growth, and in 2025 it actually sped up to plus 30.7%.
- The issue is the trajectory of profit.
- Operating and net profit peaked in 2024 (₩219.3 billion and ₩454.3 billion, respectively), then dropped sharply in 2025 — not because the business worsened but because Philly Shipyard integration and new-business investment ate into profit.
- Breaking down Q1 2026 makes this structure clear.
- Defense actually improved, with revenue of ₩471.2 billion (up 9.5%) and operating profit of ₩69.0 billion (up 37.2%, a 14.6% operating margin), and ICT also grew revenue and profit by more than 20%.
- The net loss of ₩95.8 billion resulted from Philly Shipyard, where heavy snow in the U.S.
- Northeast in January-February 2026 temporarily halted operations and produced a ₩46.6 billion operating loss, compounded by the effect of investment-asset valuation.
- This loss is closer to a one-off than a recurring item.
- The company has said it will grow 2026 defense revenue by the mid-20% range versus the prior year through expanded defense exports, and the order backlog is at a record ₩12.2 trillion.
- So this year's profit hinges on how far core defense/ICT growth and a normalization of shipbuilding in the second half offset the first-half shipbuilding one-off; on the core business alone, the profit direction points up.
- On April 20, 2026, the company, through a corporate-value enhancement plan (voluntary disclosure), kept its targets of at least 16% average annual revenue growth and 10%+ ROE through 2030, and pledged a minimum ₩350 dividend per share for 2025-2027.
- On the same day, a single sales/supply contract was also disclosed.
- In the April 27 preliminary results, defense growth (operating profit up 37%) and the ₩12.2 trillion backlog were confirmed, but a one-off loss at Philly Shipyard surfaced as a net loss of ₩95.8 billion, becoming the direct trigger for a share-price correction.
- In May, corrections to the quarterly and annual reports and an investor-briefing notice followed.
- The strengths are clear.
- The defense core is growing double-digit operating profit on Cheongung-II exports and KF-21 mass production, the ₩12.2 trillion backlog effectively reserves several years of future revenue, and the P/B of 2.84x is conspicuously low against defense peers (5.3-11.1x).
- The company's formalizing of a 10% ROE target and a dividend floor also points the direction.
- On the other side, the caution is net-profit volatility.
- With shipbuilding — the Philly Shipyard business — consolidated, external variables such as heavy snow can swing net profit sharply, and a 213% debt ratio and 87.8% current ratio leave financial slack far from ample.
- In short, the setup is strong in a phase where the core defense/ICT profit direction points up and the shipbuilding one-off normalizes, but net-profit metrics can stay depressed if the shipbuilding loss persists or the payback on new-business investment is delayed.
- Rather than the currently high trailing P/E, viewing the core-business profit recovery together with the low P/B is closer to this company's real picture.
🔎 Valuation vs peers Fairly valued
Defense peers (radar, avionics, aerospace). Hanwha Aerospace centers on ground equipment and engines, LIG Nex1 on guided weapons, and Korea Aerospace Industries on airframes; the specific fields differ but they share the defense growth cycle as a peer set.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 34.98x | 5.07x | 14.51% |
| LIG Defense & Aerospace | 60.26x | 10.68x | 17.72% |
| Korea Aerospace Industries | 78.66x | 7.99x | 10.16% |
(a) Position versus peers: among the four defense names, Hanwha Systems has the lowest P/B at 2.52x (peers 5.3-11.1x) and also the lowest ROE at 5.0%. But the low ROE is depressed by the Philly Shipyard one-off loss and new-business investment, so there is large room for improvement once the core normalizes. (b) Premium/discount: on a P/B basis it is a clear discount versus peers, but with current consolidated net profit swung by shipbuilding volatility, the P/E instead looks burdensome. (c) Limits of trailing: the current P/E of 56.9x is a value divided by depressed 2025 profit, so it exaggerates the real valuation. Given a defense operating margin rising into the 14% range and a ₩12.2 trillion backlog, the forward view leaves a path to profit recovery open, but when the shipbuilding loss normalizes governs the net-profit metric, so rather than declaring it cheap or expensive we view it as fairly valued.
Price history Close · MA20 · MA60
The latest close is ₩64,700 and the market capitalization is ₩12.2 trillion. The price sits below its 20-day moving average (₩82,950) and below its 60-day moving average (₩103,182). 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 32.0, a neutral level. The one-month change is -29.4%, the three-month change is -50.9%, and the position relative to the 52-week high is -60.2%. Relative strength versus the KOSPI is 54 (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 54% of all stocks. Over the past three months it lagged the index by 60.1%. 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 -60.10% / 6M -33.41% / 12M -49.45%
Key metrics vs sector median
Valuation
The P/E is 50.46x. The P/B of 2.52x is below the sector median (5.69x).
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, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 5.0%, below the sector average (15.0%). The operating margin is 3.3%. The debt ratio is 213.0%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.6B | $1.9B | $2.4B | +30.69% ↑ faster |
| Operating profit | $81.2M | $145.4M | $79.5M | -45.34% ↓ slower |
| Net profit | $231.5M | $301.1M | $160.5M | -46.68% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.4B | $1.5B | $1.6B | $1.9B | $2.4B |
| Operating profit | $74.3M | $15.9M | $81.2M | $145.4M | $79.5M |
| Net profit | $65.2M | -$50.7M | $231.5M | $301.1M | $160.5M |
| 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 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.
- 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 enhancement plan (voluntary disclosure): keep targets of at least 16% average annual revenue growth and 10%+ ROE through 2030; pledge a minimum ₩350 dividend per share for 2025-2027.The company sets out its medium- to long-term growth, profitability, and shareholder-return direction in official figures. Codifying a dividend floor strengthens predictability. Source
- 2026-04-20UpdateDisclosed a single sales/supply contract (supply of a defense product). Part of the backlog-expansion trend.Strengthens short-term revenue visibility. Confirms the defense export and mass-production pipeline. Source
- 2026-04-27EarningsQ1 2026 preliminary results: consolidated revenue of ₩807.1 billion (up 17%), operating profit of ₩34.3 billion (up 1.9%), and a net loss of ₩95.8 billion (swinging to a loss). Defense revenue of ₩471.2 billion, operating profit of ₩69.0 billion (up 37%), and a ₩12.2 trillion backlog. The net loss reflects a one-off operating loss at the U.S. Philly Shipyard (₩46.6 billion, from a snow-related operations halt) and the effect of investment-asset valuation.Core (defense/ICT) profit improved, but a shipbuilding one-off loss flipped the result to a net loss. The direct trigger for the sharp share-price fall. Source
- 2026-05-13FilingFiled corrections to the Q1 2026 quarterly report and the 2025 annual report.Reflects finalized financial and segment data. Confirms defense's revenue share at 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) | self-estimate approx. ₩280.0 billion | — | Unverified | link |
Recent filings
- 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.