1、Asia Pacific Equity Research11 July 2025J P M O R G A NKorea DefenseSimon Han AC(82-2)758-J.P.Morgan Securities(Far East)Limited,Seoul BranchJeongsuk Woo(82-2)758 J.P.Morgan Securities(Far East)Limited,Seoul BranchKaren Li,CFA(852)2800-J.P.Morgan Securities(Asia Pacific)Limited/J.P.Morgan Broking(Ho

2、ng Kong)LimitedKorea defense names share prices were up this week(Hanwha Aerospace+3%/Hyundai Rotem+2%/KAI+1%/LIG Nex1+16%vs Kospi+4%).This week,we saw several headline news items signaling potential order wins for our defense coverage names including:(1)Norway K9(24 units,$534M),(2)Spain self-prope

3、lled howitzers(214 units).We also saw President Lee backing up his campaign promise of creating a Defense export control tower alongside hosting regular defense export strategy meetings.As we head into the 2Q25 earnings season,we strongly believe that any weakness will be a good buying opportunity a

4、s we are confident in our names mid-term earnings growth outlook.We also see more orders to come in 2H25 and 2026,especially with the recently confirmed governmental support.We maintain OW on all Korea defense names,with our order of preference being Hanwha Aerospace Hyundai Rotem LIG Nex1=KAI.News

5、updatesHanwha Aerospace in the news Norway considers additional K9 acquisition following positive evaluation(10 July)On July 9,local media reported that the Norwegian Defense Research Institute(FFI)released an evaluation report on Project 5447,stating that the K9 VIDAR artillery system met budget,sc

6、hedule,and performance goals.The evaluation focused on the K9 VIDAR project,initiated by a 2017 contract with Hanwha to replace Norways M109 self-propelled artillery.The artillery was delivered as scheduled in 2020,and the report deemed it successful in terms of budget,schedule,and quality.Norway is