Defense: Takeaways from DX Korea 2022





The authors are analysts at Shinhan Investment Corp. They can be reached at [email protected] or [email protected] — ed.

Takeaways of DX Korea 2022

Defense Expo Korea (DX Korea) is a platform for exhibition of land forces. This year is the fifth biennial event since its first edition in 2014. Most domestic defense companies attend the defense fair, which will begin its five-day run on September 21 at the second exhibition area and outdoor area of ​​the Korea International Exhibition Center (KINTEX). started ). The first three days are for companies only (September 21-23) and the following two days are open to the general public.

DX Korea 2022 is the largest exhibition to date with 1,350 booths from 350 companies from 50 countries spread over the 88,160 square meter exhibition area. It creates the conditions for domestic defense companies to strengthen their competitiveness abroad, increase export opportunities, and promote technology exchanges and cooperation with local and global companies.

State-of-the-art weapon systems

The Defense Fair offers a rare opportunity to personally review the weapon systems and learn about the flagship products and their features offered by each company.

The domestic defense companies’ state-of-the-art weapon systems on display are as follows:

Korea Aerospace Industries: Light Armed Helicopter, KUH-1Surion

Hanwha Corp., Hanwha Defense, Hanwha Systems: Chunmoo multiple rocket launchers, K9 self-propelled howitzer, K-30 SAM

LIG Nex1: KP-SAM, long-range artillery interceptor, guided missile systems (model)

Hyundai Rotem: Panzer K2, wheeled armored fighting vehicle

Other products on display include Kia’s hydrogen generator rescue vehicle, STX Engine’s flagship engine system, Korean Air Lines’ unmanned aerial vehicle, Apache and Black Hawk helicopters, and Ghost Robotics’ military robotic dogs.

Exports to Poland should pave the way for further arms deals

DX Korea 2022 has attracted more foreign military participants than in previous years. According to media reports, a delegation from Slovakia arrived on a charter flight and senior officials from Saudi Arabia and the United Arab Emirates paid a visit to the event. Military generals from Romania, Jordan, Uzbekistan, Brazil, Ecuador, Estonia and Mongolia will also attend.

Recent arms deals with Poland total KRW 11.9 trillion, including Hyundai Rotem’s K2 tanks, Hanwha Aerospace’s K9 self-propelled howitzers and Korea Aerospace Industries’ FA-50 fighter jets (first phase). Negotiations for the export of Redback armored vehicles and Chunmoo multiple rocket launchers are underway. The economies of scale from broader adoption allow for faster weapon system upgrades. Exports to Poland drew world attention to domestic weapons.

Korean defense companies are shifting away from domestic operations and focusing on exports. It takes a long time to develop weapon systems and build up production capacities. We believe the boom in the domestic defense industry will be stronger and last longer than other sectors that have been re-rated due to export growth. Share price gains have been accompanied by higher volatility, but we still find domestic defense stocks attractive at current levels.



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