K
KJ Hwang
KJ Hwang is a Seoul-based equity research analyst at BofA Global Research (Bank of America), covering Korea defense, autos, and industrials.
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Oct 17, 2026
The last war isn't the next one; Asia and US defense fundamentals remain strong
7:35
22:17

TJ ThorntonHOST
So, you know, would you say it's likely that we see over the next, um, you know, year or so, um, evidence of more that, that can fill that gap and keep the growth rates high for, uh, some of these Asia defense companies?
K
7:49KJ HwangGUEST
And I think it could be, um, divided into two areas, regionally something outside Eastern Europe or something that's outside the conventional land system.
K
7:58KJ HwangGUEST
Because the reason why, especially Hanwha Group was able to capture that big, um, order about for fifteen trillion Korean won, uh, cumulative since two thousand twenty-two, was because after the end of the Cold War, none of these major companies were heavily investing in the howitzers, tanks, et cetera, and the delivery lead time stretched beyond five years.
K
8:22KJ HwangGUEST
South Korea was able to offer two years of the lead time, uh, urgent, uh, deliveries.
K
8:28KJ HwangGUEST
So aside from this cycle, now as we're seeing globally, now it's more about the air defense and the innovative products like counter drones.
K
8:37KJ HwangGUEST
Um, Hanwha Aerospace and LIG Defense in South Korea are the ones that are exposed to these product lineups, and still the, uh, delivery lead time is capped at about two years.
K
8:47KJ HwangGUEST
But given the, uh, new order intakes that were coming from the Saudi Arabia, UAE, and Iraq in the past two years, uh, to fill these, uh, gap in the rest of the world, South Korea is undergoing the capacity expansion right now.
13 MINS LATER

TJ ThorntonHOST
You're not the economist or the macro strategist, but, you know, do we have a positive view on Korea for some of these reasons, and is there kind of a multiple expansion story that you see or that we talk about as a result of all this?