The re-rating that stopped in America arrived here
Hanwha Aerospace widened its gains every year from 2022 through 2025: +70.4%, +74.3%, +163.6%, +227.6%. Leonardo rose four straight years over the same stretch, +50.3%, +73.6%, +89.1%, +88.1%. The American side of the same business looked nothing like this. Northrop Grumman effectively sat out 2023-24 at -12.8% and +1.9%, and RTX's best year was +61.4%. Across the Atlantic and the Pacific, the return curves of the same industry split.
This wiki now tracks five European and Korean primes: Thales, Leonardo, Hanwha Aerospace, Korea Aerospace Industries and Gilat. The piece on US primes, The prime tier's clock is the budget, concluded that prime stocks track the budget cycle more than space or defense demand. If that holds, the test is simple: primes should rise where budgets actually move. Europe and Korea are that test.
Europe: rearmament budgets built a four-year run
Defence accounts for EUR 12.2B of Thales's EUR 22.1B FY2025 revenue. The stock rose +52.5% in 2022, the year the war broke out, and +66.6% in 2025, the year rearmament showed up in results, while the years in between stayed at +14.0% and +17.8%. The stock moved only in the years the budget moved. Leonardo stacked a EUR 46B order book and rose four years running, with the Italian Ministry of Economy and Finance holding 30.2% and US budget exposure through Leonardo DRS.
The structure is the same as the US primes: a gateway that takes government budgets and passes them down the supply chain. What differs is the slope of the budget passing through. European defense budgets entered an expansion phase after 2022, and that slope became the slope of the stocks.
Korea: exports stacked a second budget clock
The Korean primes rose harder. Hanwha Aerospace gained +227.6% and Korea Aerospace Industries +217.9% in 2025, pure-play-scale returns from KOSPI defense names. The center of gravity was export contracts: Poland's third Chunmoo tranche at KRW 5.6T (KRW 13T cumulative), FA-50s to Poland at $3B and the Philippines at $0.7B. Hanwha Aerospace's 2025 consolidated revenue of about KRW 26.7T more than doubled year over year, on a KRW 31T backlog that is roughly 70% export. If a US prime runs on one national budget clock, a Korean prime runs on the sum of its importers' budgets.
Two clocks run inside Korea Aerospace Industries. Defense exports follow the budget clock; aerostructures for the Boeing 767/787 and the Airbus A320 follow the commercial duopoly's clock. After +34.6% in 2022 the stock idled in single digits through 2023-24, at +7.0% and +5.5%, and then surged in 2025 because the former rang.
The gateway role holds here too
These budget beneficiaries are also suppliers in the chain. Hanwha Aerospace sits inside RTX's supply chain as a risk-sharing partner on the P&W GTF engine, and Korea Aerospace Industries builds aerostructures for Boeing and Airbus. In Europe, satellite manufacturing is being reshaped: if the Bromo merger (Airbus 35%, Thales 32.5%, Leonardo 32.5%) completes, Thales Alenia, builder of all 81 Iridium NEXT satellites and the 20 first-generation O3b satellites for SES, folds into a single European satellite manufacturer. One layer down, Gilat rose +110.4% in 2025, showing the satcom operator re-rating (Satcom re-rating) reaching the ground-equipment layer.
Leonardo's space portfolio also includes launch. It is the largest shareholder of Avio, prime of the Vega C and builder of the Ariane 6 solid boosters, with a 19.30% stake. Its holding was diluted from 28.75% through Avio's 2025 capital increase, but the largest-shareholder position held, and Avio meanwhile rode the propulsion version of the European sovereignty theme, gaining +98.4% in 2024 and +117.0% in 2025.
The 2026 pause
All five nodes are negative in 2026: Leonardo -3.0%, Gilat -4.5%, Thales -5.9%, Korea Aerospace Industries -9.8%, and Hanwha Aerospace, the steepest riser, deepest at -20.2%. What turns a budget clock is the pace of execution. With the rearmament and export narratives already priced, the market now appears to be testing how fast those budgets convert into revenue. One contrast stands out. Airbus, where defense and space are 18% of revenue, is up +7.4% in 2026, extending a six-year positive streak. That the commercial-clock name keeps rising while the budget-clock names pause together confirms, from the reverse side, that the clock of these five is the budget.
Verdict
US primes with flat budgets went nowhere; European and Korean primes with rising budgets rose like pure-plays. The budget-clock thesis is confirmed from both directions, the negative case (America) and the positive case (Europe and Korea). It is not that primes don't re-rate; primes with stalled budgets don't. The open question is whether the 2026 give-back is an execution pause or the limit of the budget slope itself. To see these clocks side by side, continue with Many clocks.