Korea Defense What’s new in Korea defense? Position for 2Q beats and NATO Summit readthroughs; LIG D&A on Positive Catalyst Watch

Research evidence excerpt

Korea Defense What’s new in Korea defense? Position for 2Q beats and NATO Summit readthroughs; LIG D&A on Positive Catalyst Watch

J P M O R G A N Asia Pacific Equity Research

03 July 2026

Korea Defense

What’s new in Korea defense? Position for 2Q beats

and NATO Summit readthroughs; LIG D&A on Positive

Catalyst Watch

Korea defense & shipbuilding shares were stronger this week (Hanwha Aerospace Korea Defense

AC+18%, LIG D&A +8%, Hyundai Rotem +19%, KAI +14%, Hanwha Ocean +7%, Simon Han

HHI +3% vs. KOSPI -4%), rebounding from the painful sell-down in June as we (82-2) 758-5711

think investors are gradually positioning for the 2Q earnings season (see our simon.x.han@jpmorgan.com

defense and shipbuilding previews). We place LIG D&A on Positive Catalyst J.P.BranchMorgan Securities (Far East) Limited, Seoul

Watch for having the cleanest beat/ramp set up, with Hanwha

Jeongsuk Woo

Aerospace and Hyundai Rotem next best for delivery-led upside. Key near-term (82-2) 758 5703

catalysts are late-July/early-Aug earnings calls (run-rate, bottlenecks, delivery/ jeongsuk.woo@jpmorgan.com

recognition) plus Canada CPSP/US howitzer clarity and NATO-related J.P. Morgan Securities (Far East) Limited, Seoul

Branch

cooperation signals in July. Ukraine’s urgent push for Patriot interceptors further

supports near-term European air-defense replenishment demand. Karen Li, CFA

(852) 2800-8589

• What’s changed/new? New order discussions this week include Hanwha karen.yy.li@jpmorgan.comJ.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Aerospace’s K9 to India and Spain, which we see as having high win Morgan Broking (Hong Kong) Limited

probability, potentially bringing about W3T (W1.1T for India and W1.8T for

Spain) in new orders, which we estimate would lift 2028E EPS by ~c.5%. A