Daol Investment Securities reported that Hanwha Aerospace has been selected as the sole prototype supplier for the U.S. mobile tactical cannon (MTC) project, significantly increasing its prospects in the U.S. market. As a result, the firm raised its target price from 2.14 million won to 2.46 million won while maintaining a 'buy' rating.
Choi Kwang-sik, a researcher at Daol Investment Securities, stated, "Hanwha Defense USA has been selected as the sole prototype supplier for the MTC project, which aims to replace aging towed artillery in the U.S. This increases the likelihood of a production project for 498 units following performance verification."
The prototype contract is valued at $100 million for six units, with the potential to expand to a maximum of 18 units for $260 million. The contract execution period is up to 48 months. Choi noted, "If 498 units are produced, the project scale could reach approximately 10 trillion won, and when including ammunition and maintenance, repair, and overhaul (MRO) services, the total project size will be even larger."
Hanwha Aerospace plans to lease a facility in Opelika, Alabama, to establish related infrastructure and secure a local supply chain.
Choi added, "This could be the first case of K-defense weapon systems entering the U.S. market on a large scale. The K9 self-propelled howitzer, which has already secured competitiveness in the tracked howitzer market, could expand its reach into new markets through the wheeled version, K9MH."
He also noted that there is potential for further improvements in speed, operational personnel, and automation during the U.S. performance verification process. If trust is established with the U.S. military, it could quickly increase market share in the global wheeled howitzer market.
The ongoing propellant project in the U.S. is also seen as a long-term growth driver. Choi mentioned, "A smart factory for the modular propellant system (MCS) is expected to be completed in South Korea by 2028, and growth will continue through the U.S. propellant project in the 2030s."
* This article has been translated by AI.
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