Hanwha Aerospace surpassed Hyundai Motor's market capitalization. According to the Korea Exchange on the 8th, Hanwha Aerospace's market capitalization based on the previous day's closing price was 40.5672 trillion won, ranking 5th in the KOSPI market. Hyundai Motor's market capitalization dropped to 39.2865 trillion won, placing it 6th.
Earlier this year, Hanwha Aerospace and Hyundai Motor had a significant gap. Hanwha Aerospace had a market capitalization of 16.5688 trillion won, ranking 23rd in the KOSPI market, while Hyundai Motor's market capitalization was 44.2915 trillion won, ranking 5th.
This is not just a matter for our country. Since March in Germany, a reversal has occurred. Defense corporation Rheinmetall overtook the Volkswagen Group's market capitalization. Based on the previous day's closing price, Rheinmetall's market capitalization was 75.1 billion euros (approximately 118 trillion won), while the Volkswagen Group's market capitalization was 52.2 billion euros (approximately 83 trillion won), widening the gap after the reversal.
The factor that differentiated the stock price trends of the defense and automotive sectors is war. Thanks to the Russia-Ukraine war, conflicts in the Middle East, and Europe's push for rearmament, defense sector stocks have surged. Conversely, the automotive sector has suffered as a direct hit from the 'tariff war' led by the administration of U.S. President Donald Trump.
The outbreak of conflict between India and Pakistan may further widen the fortunes of the defense and automotive sectors. The Indian military operates the K9 self-propelled artillery from Hanwha Aerospace. There are many variables as to whether this conflict will remain localized or escalate into a prolonged situation, but the demand for weapons may increase.
On the contrary, Hyundai Motor, which had the largest revenue share in India at 6.3% last year among domestic corporations, may be shaken due to economic contraction from the war. Kim Seung-min, an analyst at KB Securities, assessed that Hyundai Motor, along with Samsung Electronics, Kia, and LG Electronics, is under indirect influence from the India-Pakistan conflict. He noted that while the local revenue and profit share is not large, the Indian market has established itself as a foothold for exports to emerging countries and has expanded its production capacity, suggesting that if this conflict prolongs, it could become a negative factor.
Securities firms forecast that the strength of the defense sector will continue for the time being. In particular, the average target price set by 14 domestic securities firms that have expressed investment opinions on Hanwha Aerospace has risen to 1,015,000 won this month, up from a previous level of 870,000 won.
There are variables. Hanwha Aerospace is pushing for a rights offering to secure overseas production bases. Although the Financial Supervisory Service has currently requested corrections twice, Hanwha Aerospace maintains that securing funds is essential for aggressive investments. It remains to be seen whether Hanwha Aerospace can overcome a rights offering, which is viewed negatively in the domestic stock market.