1. What Happened? Hanwha Aerospace Delivers Earnings Surprise

On July 31, 2025, Hanwha Aerospace announced an operating profit of KRW 864.4 billion, significantly surpassing market expectations. This figure represents a remarkable 19.4% increase over the analyst consensus of KRW 724.1 billion, marking a substantial earnings surprise.

2. Why Did This Happen? Unpacking the Earnings Surprise

The robust performance of the defense and marine businesses, along with a better-than-expected showing in the aviation sector, are the primary drivers of this earnings surprise.

  • • Strong Defense Business: Successful exports of the K9 self-propelled howitzer and Chunmoo multiple rocket launcher, coupled with increased domestic and international defense budgets, fueled the strong performance.
  • • Marine Business Growth: With a high export ratio, the business benefited from favorable exchange rate movements. A solid order backlog also translated quickly into revenue.
  • • Aviation Sector Resilience: Despite initial investments for engine business enhancements, the sector delivered better-than-expected results, further boosted by expanding After Market (AM) sales.
  • • Stable Raw Material Prices and Efficient Management: The impact of rising raw material prices was lower than anticipated, or efficient cost management measures contributed to improved operating profit.

3. What’s Next? Stock Forecast and Investment Strategies

A short-term stock price increase and improved investor sentiment are anticipated. The long-term outlook points towards high growth potential in the defense, marine, and aerospace sectors. However, developing an investment strategy that considers risk factors such as exchange rates, raw material prices, and the global economic slowdown is crucial. Given the marine business’s high export ratio, continuous monitoring of exchange rate fluctuations is particularly important.

4. What Should Investors Do? Key Investment Points

Investors should closely monitor future quarterly earnings announcements and market developments. Paying attention to the following factors is particularly important:

  • • Earnings Sustainability: Look beyond the short-term strong results and assess the company’s ability to maintain sustainable growth.
  • • Risk Management: Evaluate the company’s strategies to address external factors such as exchange rate fluctuations, raw material prices, and the global economic climate.
  • • Competitor Analysis: Compare Hanwha Aerospace’s performance and growth strategies with those of its competitors to inform investment decisions.