April 26, 2024

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[THE INVESTOR] Hanwha Techwin will accelerate its performance and post high growth, said NH Investment and Securities on March 22, raising the target price to 59,000 won (US$52.43) from 54,000 won.

The current stock price only reflects loss from the risks and revenue sharing partnership with Pratt & Whitney in developing next-generation aircraft engine. However, as the initial failings are being resolved, the time has come to reflect on the fundamentals of the project, said analyst Yu Jae-hun. 

The project need cash injection for the first 10 years but will be profitable over the next 30 years, explained the analyst. 

“The project’s estimated value as of the end of this year is 368.3 billion won after tax, and taking into account the drawbacks from the early stages and additional costs, 70 percent of the value should be reflected in the target price.”

The defense arm of Hanwha has begun tackling the global self-propelled artillery starting with exports to Finland, added Yu, emphasizing that its profits will grow significantly from this year. 

By Hwang You-mee (glamazon@heraldcorp.com)