Key takeaways
- South Korean defense stocks rode a wave of global rearmament for the past two years, but they have plunged in 2026.
- Hanwha Aerospace’s third-quarter operating profit fell over 46% from a year earlier, with the company citing delivery-schedule adjustments and one-off costs.
- Hyundai Rotem, which reported a more than 11.1% decline in operating profit, has seen its stock drop almost 60%.
South Korean companies have drawn buyers with weapons that were competitively priced and could be delivered relatively quickly, including tanks, artillery and missile systems, sending their shares soaring. But that rally over the past two years has given way to a sharp sell-off, with shares plunging this year.
