April 20, 2024

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[THE INVESTOR] The dip in Hanwha Techwin’s earnings in the first quarter is the right time to purchase its stocks, said NH Investment and Securities on April 24. 

The revenue and profit of the defense division and Hanwha Thales are seasonal. While Hanwha Defense’s sales were hit by the termination of its armored vehicles project, it will recover when the missile launch pads start selling more in the second half, said analyst Yu Jae-hun. 

Sales in the securities department, although slow, will continue to improve bolstered by the cost restructuring in China, according to the analyst.
In addition exports to Poland, Finland and India will be reflected in the latter half. More orders are expected to come from Norway, Estonia and Middle East, pointed out Yu, adding that in the mid- to long-term, self-propelled artillery export will boost earnings. 

Mirae Asset Daewoo was more severe, saying that it missed market expectations in the first quarter due to the company-wide underperformance. 

The securities firm lowered the target price to 61,000 won (US$53.85) from 62,000 won but maintained a “buy” recommendation saying that earnings will improve. 

In the second half, defense sector’s export will increase and Hanwha Defense and Hanwha System’s income will stabilize, said analyst Park Won-jae.

Daishin Securities acknowledged that its earnings have hit the bottom in the first quarter but upgraded its rating to a “buy” from a “neutral” and raising the target price to 58,000 won from 50,000 won. 

There is a possibility that its stocks could decline further but it could be a good time to purchase, as it will rebound in the third quarter, said analyst Lee Ji-yun. 

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