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Today, we will conduct an in-depth review of the 2026 core order trends for Hanwha Aerospace, which is breaking its all-time high order backlog as a leading K-defense stock amid an ultra-strong dollar phase in the 1,500 won range.
[Image: /stdaily/uploads/202605/gen_6a0fff71ac3cd4.70975548.png]
Core Summary
The macro environment on May 22, 2026, with the KOSPI closing at 7,847.71 and the USD/KRW exchange rate at 1,518.30, is providing strong FX gain momentum for large export defense stocks.
The elevated dollar value structurally boosts the profit margins of export companies that receive payments for weapons in foreign currency from overseas.
Hanwha Aerospace recorded an operating profit of 638.9 billion won in the first quarter of 2026, exceeding market expectations.
Furthermore, according to a recent brokerage report, the annual order expectation for the land defense sector this year is projected to surpass 10 trillion won.
At the recent Black Sea Defense & Aerospace (BSDA 2026) exhibition in Romania, the company signed a business cooperation agreement for multi-purpose Unmanned Ground Vehicles (UGV) with Milrem Robotics.
This is an important signal that the company is successfully expanding its portfolio beyond the K9 self-propelled howitzer into future artificial intelligence (AI) unmanned systems exports.
Current Situation Summary
On that day, the KOSPI closed at 7,847.71 and the KOSDAQ at 1,161.13, clearly showing an earnings-driven market centered on Korea's large export stocks.
According to Daily Stock's own Fear & Greed Index, the KOSPI is currently in the Neutral (58.6) phase, showing a somewhat stabilized trend as it digests supply from the Greed (65) state a month ago.
The U.S. NASDAQ index is also pointing to Neutral (58.2) at an overwhelming level of 26,293.10.
The NASDAQ was in Greed (63.2) a week ago and Greed (68.5) a month ago, but has entered a phase of adjusting volatility while waiting for the direction of global benchmark interest rates.
This 1,518.30 won ultra-strong dollar macro environment induces differentiation in foreign supply and demand within the KOSPI market.
To avoid FX loss risks, foreign investors are highly likely to concentrate their spot buying on KOSPI 200 large-cap export defense stocks that have solid dollar cash cows, rather than domestic demand stocks.
Recently, Hanwha Aerospace has been aggressively diversifying its order pipeline beyond Eastern Europe, such as Poland, to Romania, Saudi Arabia, and the United States.
In particular, it is proactively establishing local production plants for ground systems like the K9 self-propelled howitzer in Europe (H-ACE Europe), operating a perfect localization strategy that aligns with the global regional defense procurement trend.
Financial Analysis
Hanwha Aerospace's consolidated revenue for the first quarter of 2026 was 5.7510 trillion won, and operating profit was 638.9 billion won.
These figures represent a 5% and 21% increase, respectively, compared to the same period last year, creating synergy from the stability of the ground defense sector and the widening surplus due to the increased proportion of high-value commercial ships at its subsidiary, Hanwha Ocean.
The most striking point is the fact that the operating profit of the aerospace sector explosively surged by a whopping 533% compared to the same period last year.
Along with an increase in military supplies, the highly profitable aftermarket segment in the Risk and Revenue Sharing Program (RSP) business conducted with global engine manufacturers solidly supported the surplus trend.
[Image: /stdaily/uploads/202605/gen_6a0fff905a5ad8.25766833.png]
Below is a table intuitively summarizing Hanwha Aerospace's recent Q1 earnings and order status.
| Category | Q1 2025 | Q1 2026 | YoY Change | Major Causes & Remarks |
|---|---|---|---|---|
| Consolidated Revenue | 5.4771 Trillion Won | 5.7510 Trillion Won | +5.0% | Expansion of Hanwha Ocean's high-value commercial ship projects |
| Consolidated Operating Profit | 528.0 Billion Won | 638.9 Billion Won | +21.0% | Increase in aerospace military supplies and cost reduction |
| Ground Defense Order Backlog | Approx. 32 Trillion Won (Est.) | Approx. 39.7 Trillion Won | Continuous Increase | Reflection of new orders for Norway's Chunmoo (approx. 1.3 trillion), etc. |
This massive order backlog means that the company has secured more than 3 to 4 years' worth of work in advance.
Although there may be a temporary breather depending on the delivery schedule of quarterly export volumes, overall earnings stamina has already achieved a quantum jump.
Valuation
Currently, the fair Price-to-Earnings Ratio (PER) multiple for Hanwha Aerospace, estimated by major domestic securities firms based on 2026 earnings, is formed around 30 times.
Considering cases where leading global defense companies like Germany's Rheinmetall received a premium of 40 to 50 times PER during their momentum expansion phase, valuation merit still exists.
As of May 2026, numerous brokerages have upgraded their target stock prices to the 1.75 million won to 1.86 million won range, citing the visibility of large-scale order momentum in the second half of the year. [1][3]
If the ultra-strong dollar environment of over 1,500 won becomes entrenched within the year, there is ample possibility that KRW-converted operating profit will exceed consensus, accelerating a valuation re-rating.
Expert and Institutional Analysis
Kiwoom Securities analyzed in its latest report on May 22 that the expected order performance of Hanwha Aerospace's ground defense sector this year could exceed up to 10 trillion won. [4]
In particular, if the situation in the Middle East stabilizes, it is expected that large-scale ground weapon delivery contracts such as K9, Chunmoo, and ammunition will be concluded in conjunction with Saudi Arabia's 'Vision 2030' project. [4]
Hana Securities evaluated that the progress of the self-propelled howitzer order pipeline in the Spanish and U.S. markets will act as a strong short-term catalyst for a stock price rebound in the second half of the year. [3]
Experts unanimously agree that K-defense, which used to rely on one-off finished product exports, has now evolved into a long-term partnership phase encompassing the establishment of local production ecosystems and joint R&D investments.
[Image: /stdaily/uploads/202605/gen_6a0fffc0eeb039.97683931.png]
Romanian local media and foreign presses are also showing deep interest in Hanwha Aerospace's multi-purpose Unmanned Ground Vehicle (UGV) platforms, 'THeMIS' and 'GRUNT'. [8][9]
The common reason for favorable reviews from institutions is that the company has preempted the high value-added future battlefield market of AI-based Manned-Unmanned Teaming (MUM-T) beyond simple firepower weapons. [8][9]
Risk Factors
The first risk to watch out for is the rollercoaster-like sharp fluctuation of the USD/KRW exchange rate in line with the direction of the Bank of Korea's benchmark interest rate.
An exchange rate of 1,518 won is certainly advantageous for Hanwha Aerospace's performance, but it lowers the dollar-converted value of the overall index, which could stimulate the risk of abrupt profit-taking by foreigners at the KOSPI 7,800 level.
The second is the possibility of strict 100% localization requirements from various countries and delayed procurement budgets due to the strengthening of global protectionism.
Due to the nature of the increasingly competitive European and North American defense markets, investors should also keep in mind the scenario where the final order contract timing is postponed further than the market's initial expectation due to unexpected political variables.
Investment Perspective Summary
Hanwha Aerospace in 2026 is on an explosive growth trajectory where the 'collection period' in which secured backlogs turn into cash, and the 'order period' for next-generation unmanned systems overlap.
Even among KOSPI 200 large-cap stocks, it is rare to find a stock with such clear long-term earnings visibility over several years and that fully benefits from macro (exchange rate) factors.
However, stock investment must always be approached cool-headedly based on conditional scenarios.
Investors should keep a close eye on the order disclosure schedules of core pipelines like Romania and Saudi Arabia, as well as changes in competitors' multiples, and it is worth considering a scaled-in approach strategy when market volatility expands.
Investor Checkpoint Q&A
Q1. What is the specific principle by which the ultra-strong dollar in the 1,500 won range affects the performance of defense export stocks?
Defense export contracts are often signed long-term based on the key currency, the US dollar (USD).
When the USD/KRW exchange rate rises (won depreciation), a positive leverage effect occurs where book sales and operating profits naturally expand when converting the received dollars into won.
Q2. Which are the major countries expected in the overseas order pipeline in the second half of this year?
In the short term, the bidding results of Romania's Infantry Fighting Vehicle (IFV) and Unmanned Ground Vehicle (UGV) projects are drawing the market's attention.
In the mid-to-long term, participation in Saudi Arabia's ground weapon replacement project, Spain's K9 introduction project, and the US self-propelled howitzer modernization (SPH-M) project are key catalysts.
Q3. What is the new vision that Hanwha recently presented at the Romania defense exhibition (BSDA 2026)?
Beyond the export of its traditional mainstays, the K9 self-propelled howitzer and Chunmoo multiple rocket launcher, it has joined hands with Europe's Milrem Robotics to sign a joint development agreement for multi-purpose Unmanned Ground Vehicles (UGV). [8]
This signifies a new momentum of preempting the AI Manned-Unmanned Teaming (MUM-T) system, which is the core of future warfare.
Q4. Why is supply and demand flocking to large defense stocks instead of small and mid-cap stocks in the era of KOSPI 7,800?
In an unstable macro environment where expectations for global interest rate cuts are retreating and exchange rates are soaring, funds naturally flock to performance-driven stocks with safe-haven characteristics backed by fundamentals and order backlogs.
KOSPI 200 leading stocks like Hanwha Aerospace simultaneously serve as a refuge and a leading stock for institutions and foreigners, thanks to abundant liquidity and high earnings visibility.
Q5. Based on the Daily Stock Fear & Greed Index, is right now a good time to enter?
Currently, the KOSPI Fear & Greed Index is at 58.6, staying in the 'Neutral' phase, indicating that bubble concerns from the past extreme 'Greed' section have been resolved to some extent.
Therefore, rather than blindly chasing buys, a relatively safe strategy would be to mechanically accumulate weight by taking advantage of stock price corrections following future order disclosure schedules and quarterly earnings announcements.