[Edaily Reporter KIM YOON-JEONG ] Daol Investment & Securities assessed that HANWHA AEROSPACE(012450)has seen its prospects for entering the U.S. market significantly improve after the K9MH—a wheeled variant of the K9 self-propelled howitzer—was exclusively selected as the prototype manufacturer for a U.S. program to replace aging towed artillery. The firm estimated that mass production, following performance verification, could reach approximately 10 trillion won. It set a fair value of 2.46 million won—a 15% increase from the previous estimate—and recommended the stock as its top pick in the defense sector.

On the 20th, Lee Jun-young, an analyst at Daol Investment & Securities, stated, “The likelihood that the K9MH will be selected as the wheeled self-propelled howitzer to replace U.S. towed howitzers has become very high,” adding, “In addition to the estimated 10 trillion won in mass production value, the project’s scale could grow further through ammunition and MRO (Maintenance, Repair, and Overhaul) contracts.”
This project is the Mobile Tactical Cannon (MTC) program, aimed at replacing the U.S. military’s aging towed howitzers. Hanwha Defense USA was selected as the sole prototype manufacturer, with the contract valued at $100 million for 6 guns and up to $260 million for a maximum of 18 guns. The implementation period is up to 48 months. The analyst believes it is highly likely that mass production of 498 guns, valued at approximately 10 trillion won, will proceed following performance verification.
Hanwha is preparing to establish a local supply chain by leasing a factory in Opelika, Alabama, and setting up a center there.
Daol Investment & Securities raised the probability of winning the MTC contract from 10% to 90% to reflect this selection of a prototype manufacturer. Accordingly, the firm raised its expected profit from the order pipeline from 5 trillion won to 11.4 trillion won and increased the fair value per share by 15% to 2.46 million won. However, since mass production has not yet been finalized, the 10 trillion won worth of mass-production volume was not reflected in the earnings outlook.
The analyst assessed the significance of this project as the first large-scale entry of a K-defense weapons system into the U.S. market. He also highlighted that the K9 can expand its reach beyond the existing tracked self-propelled howitzer market into the wheeled market.
He stated, “We expect the K9MH to not only make a smooth entry into the wheeled self-propelled howitzer market but also quickly gain market share.” He explained that in the process of meeting the U.S. military’s stringent Requirements for Operation (ROC), the system’s product competitiveness—including speed, manpower requirements, and automation—will improve, and it will also secure the trust that comes with being a self-propelled howitzer operated by the U.S. military.
He also expressed optimism regarding the potential for expansion into follow-on projects. Since this MTC project is intended to replace the M777 towed howitzer, K9 derivatives could also compete for future projects to replace aging M109 Paladin self-propelled howitzers. The analyst stated, “We believe K9 derivatives are in a favorable position to compete for future projects to replace aging M109 Paladin self-propelled howitzers.”
The analyst also forecast that the propellant business currently underway in the U.S. will gain momentum. Domestically, the MCS smart factory is scheduled for completion in 2028, and the analyst predicted that growth will continue into the 2030s through the U.S. propellant business.