Geopolitical tensions in the Middle East, triggered by US and Israeli airstrikes on Iran, are fueling a global arms race and raising expectations for expanded orders at Korean defense companies. The Middle East conflict has particularly highlighted the rise of "cost-effective weapon systems," further underscoring the strengths of Korea's defense industry.
Annual Operating Profit Forecast Up to 7 Trillion Won
According to financial data provider FnGuide on April 9, the combined operating profit consensus for Korea's four major defense contractors—Hanwha Aerospace (012450.KS), Hyundai Rotem (064350.KS), LIG Nex1, and Korea Aerospace Industries (047810.KS)—is expected to reach 6.5 trillion won ($4.8 billion) this year, representing a more than 40% increase from last year. The sum of securities firms' highest forecasts for each company reaches 7.4 trillion won ($5.4 billion).
These four companies, which surpassed 40 trillion won in combined sales for the first time in 2025, have a sales consensus of 48.1 trillion won this year. Applying the highest individual forecasts, breaking the 50 trillion won mark is within reach.
Market observers suggest domestic defense companies are highly likely to achieve record earnings as geopolitical risks—including the prolonged Russia-Ukraine war, US-Iran tensions, and Taiwan Strait friction—become constant factors.
Price and Performance: "Iran Conflict Proves Korean Defense Capabilities"
Korean defense products, with their competitive pricing, fast delivery, and combat-proven performance, are emerging as key alternatives not only in the Middle East but also in Europe and Latin America.
