Hanwha

Hanwha Corporation is the controlling company of the Hanwha group, holding both operating businesses of its own and stakes in affiliates.

Its own operations consist of two divisions, construction and global, and its cash flow is composed of 45% operating cash flow from those businesses, 15% dividend income and 40% brand license income.

The spin-off approved by the board in January 2026 passed an extraordinary shareholder meeting on July 15 and took effect on August 1, with the new entity Hanwha Machinery & Service Holdings listing on the main board on August 25.

The surviving Hanwha continues in defense, shipbuilding and offshore, energy and finance, while the new entity manages the tech and life affiliates.

Daishin Securities noted in July 2026 that the surviving company retains the core listed affiliates in defense and aerospace (Hanwha Aerospace, Hanwha Systems), shipbuilding and offshore (Hanwha Ocean), energy and chemicals (Hanwha Solutions, Hanwha Impact) and finance (Hanwha Life), while running construction and a global division covering industrial explosives and advanced materials.

The split ratio, based on book net asset value, was set at 0.7563533 for the surviving entity and 0.2436467 for the new one. That ratio reflected the cancellation of 4,450,816 common treasury shares in April 2026 and 156,425 first-series preferred shares in May 2026.

Value is heavily concentrated in one asset: Mirae Asset Securities said in an August 25, 2026 report that roughly 80% of the relisted surviving entity's value sits in Hanwha Aerospace, and Kiwoom Securities noted on July 29, 2026 that the share price had tracked Hanwha Aerospace, which accounts for about 90% of net asset value.

Competitive comparison therefore happens mainly at the holding-structure level, while the own businesses are benchmarked against large domestic builders and industrial explosives and materials suppliers.

Confirmed consolidated figures show 2025 revenue of KRW 74.785tn and operating profit of KRW 4.147tn, far above 2024 revenue of KRW 55.647tn and operating profit of KRW 2.416tn. The operating margin moved from 4.0% in 2022, 4.5% in 2023 and 4.3% in 2024 to 5.5% in 2025, a clear step up.

Net profit attributable to owners, however, fell to KRW 372.5bn in 2025 from KRW 773.0bn in 2024, because only part of the KRW 1.992tn total net profit accrued to the parent's shareholders.

Of total equity of KRW 48.435tn, non-controlling interests accounted for KRW 36.595tn against KRW 11.840tn for owners, so rising affiliate profit flows through to owners only in limited proportion.

Quarterly results swung from KRW 19.242tn revenue and KRW 1.335tn operating profit in the second quarter of 2025 to KRW 17.787tn and KRW 1.344tn in the third, then KRW 21.114tn and just KRW 395.3bn in the fourth, which also carried a KRW 153.2bn net loss attributable to owners.

Momentum then returned with KRW 21.451tn revenue and KRW 1.267tn operating profit in the first quarter of 2026 and a window-high KRW 28.638tn revenue with KRW 2.409tn operating profit in the second quarter, alongside KRW 440.7bn of net profit attributable to owners.

Operating cash flow expanded steadily from KRW 1.873tn in 2022 to KRW 3.793tn in 2023, KRW 6.881tn in 2024 and KRW 8.320tn in 2025, while the debt-to-equity ratio fell from 911.4% in 2022 to 497.4% in 2025 on a consolidated basis that includes insurance subsidiary liabilities.

On a parent-only basis, the ratio was reported at around 210% as of the end of the fourth quarter of 2025. These consolidated numbers predate the split, so it matters that the assets transferred to the new entity carried 2025 revenue of KRW 6.072tn and total assets of KRW 11.347tn.

For the own businesses alone, preliminary second-quarter 2026 parent revenue was KRW 1,001.3bn and operating profit KRW 113.3bn, down 11.4% and 12.6% year on year, with net profit of KRW 51.0bn swinging back into the black from a prior-year loss; construction posted KRW 577.4bn revenue and KRW 58.4bn operating profit, down 22% and 30%, while the global division grew revenue 7% to KRW 353.5bn but saw operating profit fall 29% to KRW 4.9bn.

The surviving company's end markets split into defense, shipbuilding and offshore, energy, finance, and its own construction and explosives operations.

Defense has moved into the phase where export backlogs convert into deliveries: the four largest Korean defense contractors posted combined second-quarter 2026 revenue of KRW 13.177tn and operating profit of KRW 1.752tn, up 36.3% from KRW 1.285tn a year earlier, for a combined margin of about 13.3%.

Hanwha Aerospace reported second-quarter 2026 consolidated revenue of KRW 9.293tn, operating profit of KRW 1.366tn and a 14.7% margin, with ground defense revenue of KRW 2.108tn.

Ground defense backlog stood at about KRW 38.3tn, reflecting additional K9 howitzer exports to Finland and a follow-on Chunmoo supply contract with Estonia.

Industry attention in the second half is on whether the U.S. howitzer modernization program, the Spanish howitzer project, further Polish contracts and Middle East projects close, though observers caution that order expectations alone do not confirm earnings durability.

Shipbuilding sits on a backlog skewed to high-value vessels: Hanwha Ocean's delivery-based backlog was 153 vessels worth USD 33.77bn, of which LNG carriers accounted for 57 vessels and USD 14.46bn, more than 40% of the total.

Energy and chemicals show early recovery signals, as Hanwha Solutions posted second-quarter 2026 consolidated revenue of KRW 4.583tn and operating profit of KRW 306.5bn, up 47.01% and 200.33% year on year, with renewables contributing KRW 2.482tn of revenue and KRW 166.4bn of operating profit.

By contrast, the domestic construction market feeding the own businesses was described as weighed down by a downturn and raw material cost pressure.

The company's stated capital allocation framework is relatively specific.

Hanwha plans to direct 25% of generated cash flow to shareholder returns, actively consider additional dividends if free cash flow and distributable reserves grow, spend KRW 700bn in total through 2030 across facilities, research and development and equity investments, and allocate the largest share, 45%, to balance sheet repair and working capital.

It also said it would keep reducing cash interest costs, which ran at roughly KRW 200bn in 2025. Funding for participation in the Hanwha Solutions rights offering is to come from sales of non-operating and non-core assets rather than new borrowing. On the own-business side, Iraq is the biggest swing factor.

The company said it aims for a second-half rebound on the back of approval to restart the remaining 70,000 units of the Bismayah New City Project and a backlog of about KRW 13.4tn excluding Bismayah's KRW 9.6tn, and it is awaiting the Iraqi cabinet approval that is a precondition for the restart.

The global division cited stable growth in explosives sales on recovering construction demand and top-line growth in trading from higher petrochemical prices.

At the affiliate level, Hanwha Aerospace said it would continue second-tranche Polish K9 production and K9 deliveries to Egypt and Australia in the second half, while Hanwha Solutions guided to higher residential energy revenue in the third quarter and full operation of the solar value chain at its Cartersville plant.

As for sell-side estimates, SK Securities projected on July 21, 2026 consolidated 2026 revenue of KRW 86.116tn and operating profit of KRW 5.455tn, though that estimate predates the split and therefore covers a different consolidation perimeter than the surviving entity.