Hanwha Systems Co., Ltd. (272210)

**Business Overview** Hanwha Systems is a global total solutions company that provides differentiated smart technologies through the synergy of advanced defense electronics and future ICT technologies. Its main business areas are divided into the Defense segment and the ICT segment. In the Defense segment, it develops advanced systems and solutions in surveillance and reconnaissance, communication and cyber, maritime systems, aerospace, and ground sectors. Key products include the Korean Fighter (KF-21) AESA Radar, Multifunction Radar (MFR), Tactical Information Communication Network (TICN), and Naval Combat Systems. In the ICT segment, it provides services such as digital transformation, system integration, and IT outsourcing. Recently, the company has been actively expanding its business into new areas such as aerospace, Urban Air Mobility (UAM), and satellite communication. The Defense segment accounts for the majority of revenue, with defense export revenue representing 21% of annual revenue in 2025. Its major clients include government agencies related to the Republic of Korea's national defense and domestic and international private companies. It is strengthening its expansion into overseas markets such as the United Arab Emirates (UAE), Saudi Arabia, Poland, and the Philippines. **Core Competencies** With over 40 years of experience and as the leading domestic company in defense electronics spanning land, sea, air, space, and cyber, Hanwha Systems possesses unparalleled technological competitiveness. Notably, it is the only domestic company to have participated in the development of the Korean Fighter (KF-21) AESA Radar and proven its performance. Its Multifunction Radar and SAR satellite technologies are also key strengths. Furthermore, it possesses the capability to respond to future battlefield environments and lead digital transformation through the convergence of defense and ICT technologies. Recently, it became the first domestic defense company to be selected for the 'Dow Jones Sustainability Index Asia Pacific', receiving international recognition for its ESG management leadership. **Performance Analysis** Hanwha Systems' revenue has shown a consistent growth trend. Revenue increased by 12.1% from KRW 2.188 trillion in 2022 to KRW 2.4525 trillion in 2023, and grew by 14.3% to KRW 2.8037 trillion in 2024. In 2025, it recorded KRW 3.6642 trillion, achieving a high revenue growth of 30.7% year-over-year. However, profitability somewhat slowed in 2025. Operating income decreased by 45.3% from KRW 219.3 billion in 2024 to KRW 119.9 billion in 2025. The operating income margin also declined from 7.8% in 2024 to 3.3% in 2025. This is attributed to losses related to the Philly Shipyard and the recognition of PPA amortization expenses. Net income decreased from KRW 445.4 billion in 2024 to KRW 209.1 billion in 2025. In Q1 2026, the company maintained profitability, recording revenue of KRW 807.1 billion and operating income of KRW 34.3 billion. **Financial Health** Examining Hanwha Systems' financial health, the debt-to-equity ratio increased from 95.43% in 2022 to 136.6% in 2024, but improved to 106.5% in 2025, maintaining a stable level. Return on Equity (ROE) recorded a loss of -4% in 2022, but significantly improved to 15.93% in 2023 and 18.14% in 2024, demonstrating strong profitability. However, in 2025, it significantly declined to 4.18% year-over-year, showing a somewhat disappointing performance in terms of profitability. **Outlook** Hanwha Systems is expected to benefit from the growth of the defense market driven by increasing global geopolitical risks. In particular, defense export momentum, centered on radar and satellite technologies, is expected to strengthen. The establishment of a mass production system for satellites through the Jeju Space Center and the potential of the low-earth orbit satellite communication business are becoming visible. Furthermore, the stabilization of production at Philly Shipyard and the potential entry into U.S. Navy projects are also expected to positively impact future performance improvement.