1、Asia Pacific Equity Research31 October 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

2、(Hong Kong)LimitedKorea defense names share prices were mixed this week(Hanwha Aerospace+1%,Hyundai Rotem+5%,KAI-4%and LIG Nex1-2%vs.Kospi+12%)as all eyes were focused on the 2025 APEC Summit event(link to our Day 1&Day 2 takeaway reports),where we reaffirmed President Lees active support to foster

3、K-defense exports alongside the Korea and Canada Summit which saw a strengthening of bilateral defense ties.On new order win updates,we saw multiple headlines including:1)Hanwha Iraq M-SAM II component orders;2)KAI Philippines KF-21 orders;3)Hyundai Rotem Middle East(Saudi,Iraq,UAE)K2 orders;4)Hyund

4、ai Rotem Peru K2 orders;and 5)LIG Nex1 ATGM Middle East orders.Heading into earnings season,our defense coverage names will be reporting 3Q earnings next week(Hanwha Aerospace&Hyundai Rotem:November 3,KAI:November 5,LIG Nex1:November 6).We expect Hyundai Rotem to beat consensus estimates,LIG Nex1 ea

5、rnings to be in-line,and Hanwha Aerospace(from Hanwha Ocean&Hanwha Systems miss)/KAI to miss.Looking beyond 4Q25,based on a strong rebound in September exports,we see upside risk to Hanwha Aerospace and Hyundai Rotems 4Q25 land system export sales and view the recent share price volatility as a good

6、 entry point.Our order of preference in Korea defense is:Hanwha Aerospace(top pick)Hyundai Rotem LIG Nex1 KAI.News updatesHanwha Aerospace in the newsEstonia boosts long-range power with major South Korean rocket system deal(30 October)Estonia is significantly expanding its long-range artillery arse