Korean Arms Maker’s 3,100% Rally Tests Limit of Defense Boom

South Korea’s Hanwha Aerospace Co. has emerged as the world’s best-performing defense stock as investors bet the upending of security alliances by US President Donald Trump will spur a buying spree for weapons, particularly in the affordable conventional arms the company’s been making for decades.

Its parent Hanwha group, the country’s seventh-largest family-controlled conglomerate, is hoping to capitalize on the expected boom with a massive share sale for its weapons unit to finance large-scale investments and overseas deals. Now regulators, as well as some investors, are starting to ask whether it’s getting ahead of itself.