On July 16, 2026, Hanwha Aerospace (KRX: 012450) closed at 943,000 won, up 1.5% on the day. Three years earlier, in mid-2023, the same stock traded in the 150,000-won range. The six-fold move is backed by real numbers — revenue nearly tripled between 2023 and 2025 — but it has also pushed the stock’s price-to-earnings ratio to roughly 1.8 times Lockheed Martin’s. As a Korean retail investor who has watched this name go from an unglamorous precision-machinery maker to the most-discussed defense stock on the KOSPI, I think the backlog story and the valuation story deserve to be told separately, because they point in different directions.
From precision instruments to NATO’s gun of choice
Hanwha Aerospace’s roots go back to 1977 as Samsung Precision Industries, a maker of precision machinery and optics. Samsung’s defense and machinery unit was folded into Hanwha Group in 2015, renamed Hanwha Aerospace in 2018, and absorbed Hanwha Defense — the maker of the K9 self-propelled howitzer and the Chunmoo multiple rocket launcher — in 2022–23, unifying land-systems production under one entity. In December 2023 the company acquired Hanwha Ocean (formerly Daewoo Shipbuilding), adding submarines, special-purpose vessels and commercial shipbuilding to the portfolio. In 2026 it raised its combined stake in Korea Aerospace Industries (KAI) to 11.21% and began funding the U.S. Philly Shipyard buildout under the “MASGA” (Make American Shipbuilding Great Again) initiative.
The K9 is now the most widely exported self-propelled howitzer in the world. Poland alone has signed roughly 18.6 trillion won ($13.5B) in cumulative contracts, and the second-batch delivery of 146 K9PL units began shipping in July 2026. Norway ordered Chunmoo rocket systems worth 1.3 trillion won ($940M) as an alternative to the U.S. HIMARS, citing shorter lead times. Egypt, Australia and, most recently, Vietnam have joined the customer list.
The numbers behind the rally
| Year | Revenue | Operating profit |
|---|---|---|
| 2023 | 9.37T won (~$6.8B) | 0.74T won (~$536M) |
| 2024 | 11.25T won (~$8.2B) | 1.72T won (~$1.25B) |
| 2025 | 26.60T won (~$19.3B), +137% YoY | 3.03T won (~$2.2B), +75% YoY |
| 2026E (consensus) | 31.50T won (~$22.8B) | 4.40T won (~$3.2B) |
2024 was the first year any Korean defense company crossed both 10 trillion won in revenue and 1 trillion won in operating profit. 2025’s jump came from European deliveries finally hitting the income statement. But because large-platform deliveries (K9s, Chunmoo launchers) get recognized in lumps rather than smoothly, quarterly results swing hard — Q1 2026 missed consensus, with the bulk of this year’s deliveries weighted toward the second half.
Four businesses under one roof
Land systems (K9, Chunmoo) is still the backbone: roughly 37.2 trillion won of the group’s ground-defense backlog alone was on the books at end-2025. Aerospace and space covers KF-21 fighter-engine assembly, domestic engine production (T-700/F404), and Nuri rocket technology transfer — a business the enlarged KAI stake is meant to knit closer together. Hanwha Ocean brought submarine, special-vessel and commercial shipbuilding capacity, pairing land-systems cash flow with large, lumpy shipbuilding orders. The U.S. push, anchored by the Philly Shipyard in Pennsylvania, targets Navy MRO and commercial newbuild work, with 531 billion won ($385M) budgeted for 2026 capex alone and a stated 7 trillion won ($5.1B) investment plan through 2035.
The controversy the backlog story leaves out
In March 2025, Hanwha Aerospace’s board approved a 3.6 trillion won ($2.6B) rights offering — the largest in Korean stock-market history. The stock fell more than 13% the next trading day. The Korea Corporate Governance Forum accused the company of using its own cash to buy Hanwha Ocean shares from affiliates tied to the controlling family, then turning to retail shareholders to fund new investment — a sequence it called value-destructive. Under pressure, the board cut the offering to 2.3 trillion won in April and shifted part of the funding to a third-party allotment involving Hanwha Energy and related affiliates. The episode didn’t derail the growth story, but it left a scar on how the market prices any future capital call from this name.
What the premium actually costs
Market capitalization sits around 48.6 trillion won (~$35.2B) with roughly 51.4 million shares outstanding. The trailing P/E is about 32–34x and P/B about 4.9x — a premium of roughly 1.8x over Lockheed Martin’s multiple. Broker target prices, drawn from reports published between late 2025 and mid-2026, span a wide range: Meritz Securities at 600,000 won, SK Securities at 1,000,000 won, Kiwoom Securities at 1,400,000 won (November 2025, with the stock then at 960,000 won), and Daishin Securities at 1,800,000 won. That spread — nearly 3x between the low and high estimate — is itself a signal that the Street hasn’t converged on how much of the backlog to price in today versus later.
Reasons to take it seriously
A roughly 39.7 trillion won consolidated backlog — about four years of current revenue — gives real downside protection to near-term results. The K9/Chunmoo franchise is riding a European rearmament cycle that shows no sign of ending soon, with genuine diversification into new buyers (Egypt, Australia, Norway, Vietnam). The vertical stack from land systems through aerospace, space and now shipbuilding — reinforced by the larger KAI stake — is a real structural advantage few peers can match. And the Philly Shipyard bet gives Hanwha an early foothold in a U.S. shipbuilding-revival push that is a stated bilateral policy priority, not just a corporate ambition.
Reasons to be skeptical
The valuation already assumes a lot goes right: at nearly double Lockheed’s multiple, any delivery delay or margin miss has more room to hurt the stock than to be shrugged off. The 2025 rights-offering episode is a real governance data point, not a one-off — it showed the controlling family will use shareholder capital to fund intra-group share purchases, and there’s no structural change preventing a repeat. Quarterly results will keep swinging on delivery timing; Q1 2026 already missed consensus once this year. And the U.S. shipbuilding push, while strategically sound, is still in its early buildout phase — a 7 trillion won plan through 2035 is a long runway with plenty of room for execution risk between here and there.
Checkpoints that would actually move the picture
Three things are worth watching in coming quarters: whether second-half 2026 K9/Chunmoo deliveries land on schedule and close the Q1 shortfall; whether Philly Shipyard shows measurable productivity gains rather than just capex headlines; and whether Hanwha Aerospace goes back to the capital markets for another large raise, and if so, how it’s structured. Until the valuation gap and the governance question both get some resolution, this looks — in my own framework — less like a stock still mispriced by the market and more like a genuinely strong business whose good news is already mostly in the price.
Nothing in this article is financial or investment advice. All figures are drawn from public company disclosures, brokerage reports and news sources as of July 2026 and may contain errors or be revised; verify against primary filings before making any decision. The author does not hold a position in the stock discussed.
Sources
- Hankyung — Hanwha Aerospace: Poland, Egypt, Australia sales rise, Saudi talks resume (2026-07-15)
- G-enews — First shipment of Poland-bound K9PL, backlog conversion begins (2026-07-06)
- Investing.com (MoneyS) — Poland exports alone reach 18.6 trillion won
- Seoul Economic Daily — Hanwha Aerospace Rises 6% on Added KAI Stake (2026-07-02)
- Economidaily — Korea Corporate Governance Forum: Hanwha Aerospace rights offering destroys shareholder value (2025-03-25)
- Newdaily — Four reasons Hanwha Aerospace changed its rights-offering structure (2025-04-08)
- ETNews — Korea-U.S. shipbuilding alliance “MASGA” gets underway, Philly Shipyard fully backed (2026-03-18)
- Inthenews — [FY2024 results] Hanwha Aerospace posts 11.2T won revenue, 1.7T won operating profit
- Aseanexpress — Hanwha Aerospace posts record 2023 results, revenue near 9 trillion won
- Kiwoom Securities — Company Update: BUY, target price 1,400,000 won (2025-11-13)