Korea Defense/Industrials tour takeaways

We hosted a Korea Defense/Industrials tour during 16-18 September, visiting HD Hyundai Heavy Industries' shipyard and HD Hyundai Electric's factory, with group meetings involving twelve companies across the Defense, Shipbuilding, and Power equipment sectors. In Defense, Hanwha Aerospace was selected as sole prototype contractor for the US SPH prototype program (potential ~500 units, KRW7-10tn); LIG D&A raised its 2026E new order target to KRW5tn; Hyundai Rotem updated its K2 export pipeline across four countries, with Poland EC3 potentially contracted by 2027E; KAI's weak 2Q reflected LAH delivery delays and FX, with the Indonesia KF-21 export contract expected in 2H26E. In Shipbuilding, HD KSOE is expanding engine capacity and expects an LNG recovery in late 2026-27E; Samsung Heavy Industries sees continued margin improvement backed by high-priced backlog;