[Edaily Reporter Kwon Oh-seok] DS Investment & Securities stated on the 15th regarding defense-related stocks, “One of the traditional misconceptions about the defense industry is the view that a decline in stock prices is inevitable once a war ends,” adding, “The end of the war in Iran will actually serve as a positive catalyst for the South Korean defense industry.”

Kang Tae-ho, an analyst at DS Investment & Securities, explained, “This is because there are numerous export pipelines to the Middle East that will gain momentum after the war ends.” He added, “#Hanwha Aerospace has been in discussions with the Saudi Ministry of National Guard (MNG) regarding the acquisition and modernization of ground weapons, including armored vehicles and self-propelled artillery. "While specific discussions appear to have been suspended due to the current war situation, we anticipate that orders will become more likely as negotiations resume after the war ends," he said.
He continued, “#Hyundai Rotem has been discussing the export of approximately 250 K2 tanks to Iraq. Negotiations can resume once the situation in the Middle East stabilizes, and considering that development of the ‘K2ME’—a Middle East-specific derivative model—has already been completed, there is a high probability of a contract being signed in the second half of this year or the first half of next year.”
Regarding the Cheongung-II, produced by #LIG Defense & Aerospace and Hanwha Aerospace & Systems, the firm noted that export negotiations are expected to proceed with several Middle Eastern countries. It emphasized, “We anticipate new exports to countries that have not yet acquired the system—such as Kuwait and Qatar, which have faced direct attacks from Iran—as well as additional orders from existing customers.”
He predicted, “Given the ongoing supply shortages of Patriot and PAC-3 MSE systems, demand for the Cheongung-II is expected to strengthen further after the war ends. Even after the war concludes, Iran’s missile capabilities will remain intact, and considering the presence of Hezbollah and Houthi rebel forces, the structural demand for strengthening air defense capabilities in the Middle East will persist.”
Researcher Kang noted, “It is reported that #Korea Aerospace Industries is in discussions with the UAE and Saudi Arabia regarding KF-21 exports and international joint development of 5th and 6th generation fighters. The UAE’s withdrawal from the Rafale F5 project in April 2025 suggests a heightened likelihood of reviewing alternative platforms. We expect in-depth discussions on a joint development roadmap with South Korea to unfold after the war ends.”
He added, “We believe the valuation of the Korean defense industry has entered an attractive range due to concerns over deteriorating investor sentiment and a temporary gap in orders following the end of the war.” He continued, “We forecast that defense sector stock prices will shift to an upward trend in the second half of the year, alongside accelerated discussions on orders for the Middle East following the end of the Iran war. We maintain our recommendation to increase exposure to the defense sector.”