Goldman Sachs: Korean defense and robotics sectors poised to regain market attention in 2H26

Overview

This report summarizes investor feedback following Goldman Sachs' US marketing in New York and Boston. Investors focused on 2H catalysts for the Korean market and which sectors could generate broader industry performance beyond a market structure heavily weighted toward memory. The report believes the Korean defense and robotics sectors could perform well in 2H26.

Core views

The core views are: first, the Korean defense sector's weak 2Q performance was mainly due to stalled order progress, the market's preference for memory, and weak global defense peer share prices, but 2H order momentum, an expanding European TAM, and valuation compression could drive a recovery; second, recent order leads from Europe and emerging markets indicate that the delivery speed and execution capabilities of Korean defense companies are gaining greater recognition; third, although Korean robotics remains in the early stages of a long-cycle growth phase, global policy support, venture activity, and technology standardization are accelerating, making early positioning attractive.

Analysis framework

The report combines roadshow feedback, recent order and policy events, valuation multiples, earnings forecasts, VC investment activity, and thematic catalysts to assess the relative opportunities for Korean defense and robotics in 2H. Individual stock target prices are primarily based on applying target P/E multiples to forward EPS, while some robotics-related names use a framework that discounts 2035E EPS back to June 2027.

Methodology notes

• Valuation methodstarget P/E multiple

  Target P/E valuation

  Hanwha Aerospace's target price is based on applying a 28.0x target P/E to 2027E EPS; Hyundai Rotem's is based on applying a 20.8x target P/E to 2027E EPS; Hyundai Mobis, HL Mando, and Robotis are based on applying 15.0x or 60.0x target P/E multiples to 2035E EPS and discounting back to June 2027.

• factor_profileGS Factor Profile

  Goldman Sachs Factor Profile

  The GS Factor Profile compares individual stocks' positions relative to the market and industry peers across growth, financial returns, valuation multiples, and composite scores. Growth and financial returns are based on forward sales, EBITDA, EPS, ROE, ROCE, CROCI, and other metrics, while valuation multiples are based on P/E, P/B, P/D, EV/EBITDA, EV/FCF, and other metrics.

• corporate_activityM&A rank

  M&A probability score

  Goldman Sachs uses an M&A rank from 1 to 3 to assess the potential acquisition probability of covered companies: 1 represents high probability, 2 medium probability, and 3 low probability. Companies ranked 1 or 2 may have an M&A component incorporated into their target prices.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Korea Defense

  Core industry theme

  Strengths

  Order momentum is expected to strengthen in 2H, the Western European TAM is expanding, valuations are more attractive relative to earnings, and correlation with the AI theme is low.

  Weaknesses

  The sector significantly underperformed in 2Q, order progress had previously stalled, and it was affected by weak global defense peer share prices.

  Comparison

  Compared with the Korean market structure, which has a high memory weighting, defense offers different catalysts and portfolio diversification characteristics.

  Risks

  Orders fail to materialize as expected, overseas production OPM falls short of expectations, demand from the NATO Eastern Flank and MENA is weaker than expected, geopolitical developments shift procurement priorities toward domestic suppliers, and KRW strengthens against USD.

• Korea Robotics

  Core industry theme

  Strengths

  Global policy priority is increasing, robotics VC deal activity is at a high level, technology standardization is lowering commercialization barriers, and long-term growth potential is substantial.

  Weaknesses

  Most investors believe humanoid-robotics adoption will take time, while near-term earnings and order validation remain insufficient.

  Comparison

  Compared with defense, robotics is more of a long-duration growth asset driven by policy, technological breakthroughs, and global industrial competition.

  Risks

  Commercialization progresses more slowly than expected, humanoid-robotics orders are insufficient, rising capital expenditures pressure margins, and price competition for key products erodes earnings.

• Hanwha Aerospace

  Representative Korean defense name

  Strengths

  It benefits from the Spain K9 order lead and the Thales/Hanwha Aerospace Chunmoo guided missiles MOU; the target-price framework indicates room for earnings and valuation recovery.

  Weaknesses

  It depends on order wins, overseas production margins, and the realization of demand in Europe and MENA.

  Comparison

  Together with Hyundai Rotem, it forms part of the Korean defense recovery theme. The report uses 12-month forward P/E and GSe EPS to illustrate valuation and earnings.

  Risks

  Orders fall short of expectations, overseas production OPM is below expectations, regional demand is weaker than expected, procurement priorities shift toward domestic suppliers, and KRW strengthens.

• Hyundai Rotem

  Representative Korean defense name

  Strengths

  Order bottlenecks in Iraq and Peru, previously affected by political uncertainty, are easing, and an order recovery in 2H could boost momentum.

  Weaknesses

  Previously stalled orders and weakness among global defense peers pressured the share price.

  Comparison

  Together with Hanwha Aerospace, it is a key focus of the report's defense-sector valuation and earnings analysis.

  Risks

  Order wins fall short of expectations, overseas production OPM is below expectations, demand from the NATO Eastern Flank and MENA is insufficient, geopolitical developments shift procurement toward domestic suppliers, and KRW strengthens against USD.

• Hyundai Mobis

  Key robotics-related idea

  Strengths

  The report identifies it as one of the key ideas in the Hyundai Motor Group robotics theme; it is Buy-rated with a W710,000 target price.

  Weaknesses

  The valuation framework relies on distant 2035E EPS discounted back, implying a long duration.

  Comparison

  Compared with pure-play robotics companies, Hyundai Mobis is a robotics and autonomous-driving enabler within the value chain of a large automotive group.

  Risks

  Cost inflation pressures margins, a fire at the India plant causes production disruption, or Boston Dynamics or HMG autonomous-driving progress is slower than expected.

• HL Mando

  Auto-parts and humanoid-robotics actuator theme

  Strengths

  The report identifies it as a key auto-parts robotics-related idea; it is Buy-rated with a W109,000 target price.

  Weaknesses

  Stagnation in the ADAS business and increased North American capital expenditures could pressure margins.

  Comparison

  Compared with Hyundai Mobis, HL Mando is more focused on the order-validation logic of auto parts and actuators.

  Risks

  No humanoid-robotics actuator order is secured by the end of 2027, North American capital expenditures remain high, the ADAS business stagnates, or cost inflation persists.

• Robotis

  Pure-play robotics name

  Strengths

  The report identifies it as a pure robotics name; it is Buy-rated with a W630,000 target price and a 60.0x target P/E.

  Weaknesses

  It is highly dependent on future humanoid-robotics orders and capacity execution.

  Comparison

  Compared with automotive-group or component names, Robotis offers greater purity of robotics exposure, but its valuation and execution risks are also more concentrated.

  Risks

  The Uzbekistan facility progresses more slowly than expected, no major humanoid-robotics actuator orders are secured in 2027/2028, or aggressive pricing of key products dilutes margins and earnings.

Key data

• Report date2026-07-10The date corresponding to the file name and report content.
• Roadshow locationsNew York & BostonThe report states that investors focused on 2H catalysts during the US marketing period.
• Defense catalystsSwiss air-defense system, Spain K9 order, LIG D&A/Rheinmetall MOU, Thales/Hanwha Aerospace MOU, end of Peru electionThese events are used to support the view that Korean defense order momentum is recovering.
• Hanwha Aerospace target priceW1,810,000Based on applying a 28.0x target P/E to 2027E EPS.
• Hyundai Rotem target priceW280,000Based on applying a 20.8x target P/E to 2027E EPS.
• Hyundai Mobis target priceW710,000Buy-rated; based on applying a 15.0x target P/E to 2035E EPS and discounting back to June 2027.
• HL Mando target priceW109,000Buy-rated; based on applying a 15.0x target P/E to 2035E EPS and discounting back to June 2027.
• Robotis target priceW630,000Buy-rated; based on applying a 60.0x target P/E to 2035E EPS and discounting back to June 2027.
• Goldman Sachs global equity coverage3,074 stocksDisclosure information as of April 1, 2026.
• Rating distributionBuy 50%, Hold 34%, Sell 16%The distribution of Goldman Sachs global coverage ratings shown in the disclosure table.

Impact & implications

If the report's view is realized, Korean defense could recover from its 2Q weakness and become a diversification allocation in the Korean market with low AI correlation, relative value, and order catalysts. Robotics is more of a long-term growth theme, with near-term catalysts from policy, investment enthusiasm, and commercialization standardization, making it suitable to monitor key enablers across the value chain and progress toward real-world humanoid-robotics applications.

Risks

• Korean defense order wins fall short of expectations.
• Overseas production OPM is below expectations.
• Demand from NATO Eastern Flank and MENA countries is weaker than expected.
• Regional geopolitical changes shift procurement priorities toward domestic suppliers.
• KRW strengthening against USD weakens the earnings or order value of related companies.
• Robotics commercialization and humanoid-robotics adoption progress more slowly than expected.
• Humanoid-robotics actuator orders fail to materialize in 2027 or 2028.
• Cost inflation, rising capital expenditures, or production disruptions pressure margins.
• Price competition for key products may dilute margins and earnings.

What to watch

• Korean defense order announcements and the pace of backlog recovery in 2H26.
• Progress in Swiss air-defense system procurement.
• Whether the Spain K9 order is ultimately secured by Hanwha Aerospace.
• Subsequent commercialization progress following the LIG D&A/Rheinmetall and Thales/Hanwha Aerospace MOUs.
• Actual contract conversion after order bottlenecks ease in Peru and Iraq.
• Funding arrangements for the Korean government's robotics data training center and policy implementation following the robotics CEO roundtable.
• Policy changes after the US identifies robotics as a key technology-competition and national-security priority.
• The contribution of open robotics safety systems such as Nvidia Halos to humanoid-robotics certification and commercialization.
• Validation of humanoid-robotics orders, capacity, and margins at Hyundai Mobis, HL Mando, and Robotis.