April 19, 2024

• 

[THE INVESTOR] Hanwha Aerospace’s earnings will advance gradually, said Mirae Asset Daewoo on Aug. 14, maintaining a “buy” recommendation and 32,300 won (US$28.50) target price. 

Its operating profit in the second quarter dropped 41 percent on-year to 13.8 billion won and revenue fell 2 percent to 1.01 trillion won. Risk-sharing partnership in aircraft engine and parts sector incurred 26.6 billion won cost, but earnings of Hanwha System and Hanwha Precision Machinery were better than expected. Revenue from Tactical Information Communication Network for army was higher than expected and sales of chip mounters expanded from strong Chinese and Vietnamese markets, said analysts Park Won-jae and Yoo Seung-ho.

Given the favorable exchange rate, its earnings are likely to improve further. Revenue in the third quarter will hike 33.6 percent on-year to 1.16 trillion won and operating profit will skyrocket 1,119.4 percent to 26.8 billion won. Rising costs in aircraft engine and parts sector, however, is a matter of concern, and recent rise in sales of geared turbo fan engines is encouraging but it will not be easy to cut costs next year, they said. 

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