As of 12:30 p.m. on the 2nd, Hanwha Aerospace was trading at 738,000 won, up 6.03% from the previous trading day.
Hanwha Ocean rose 11.00% to 55,500 won, while Hanwha Engine climbed 11.73% to 32,850 won. Hanwha Systems also traded at 65,400 won, up 8.10%.
Shares of related affiliates are rising in tandem following news that Hanwha Aerospace’s U.S. subsidiary, Hanwha Defense USA, has secured a contract to build a U.S. Navy vessel.
Hanwha Defense USA announced on the 29th of last month (local time) that it had signed a contract to build one medium landing ship (LSM) for the U.S. Navy and Marine Corps.
The contract, valued at $269 million (approximately 360 billion won), was signed with TOTE Services, which handles shipbuilding and management for the U.S. Navy. Actual construction will be carried out by Hanwha Philly Shipyard in Philadelphia.
The contract also includes an option to build three additional medium landing ships. Construction is scheduled to begin in the fourth quarter of next year.
This marks the first time Hanwha has secured a U.S. Navy shipbuilding contract since acquiring Hanwha Philly Shipyard in December 2024.
Following its participation in the U.S. Navy’s Next-Generation Logistics Support Ship (NGLS) conceptual design project last March, Hanwha Philly Shipyard was selected in July as the contractor for the Maritime Missile Test and Instrumentation Vessel (MRIV) construction project.
The U.S. Navy and Marine Corps plan to procure a total of 35 medium landing ships. This contract was secured amid the ongoing “MASGA (Make American Shipbuilding Great Again)” project, which South Korea and the United States are jointly pursuing to revitalize the U.S. shipbuilding industry.
Michael Coulter, CEO of Hanwha Defense USA, stated, “Since acquiring Philly Shipyard in 2024, Hanwha has made significant investments in personnel and technology to establish a shipbuilding base for federal government customers, including the U.S. Navy,” adding, “We will continue to collaborate with Tott Services to ensure the ships are delivered on schedule and within budget.”
Hanwha Ocean also received a separate boost with the successful localization of core submarine equipment.
On the 1st, Hanwha Ocean announced that, following approximately 10 years of collaboration with the Agency for Defense Development (ADD), it had independently developed a “water-ram type horizontal launch system” for submarines using domestic technology. This system uses hydraulic pressure to launch weapons such as torpedoes and is expected to reduce costs and shorten delivery times by replacing existing imported equipment.
On the 30th of last month, the company also signed a contract with a Bermuda-based shipowner to build two Very Large Crude Carriers (VLCCs) for 356.8 billion won. Hanwha Ocean’s consolidated operating profit for the third quarter of this year was 485.7 billion won, a 67.6% increase compared to the same period last year.
However, despite the sharp rise on that day, the stock prices of major Hanwha Group affiliates remain less than half of their 52-week highs.
Hanwha Aerospace traded at a price 56.9% lower than its 52-week high of 1,713,000 won. Hanwha Ocean was down 64.1% from its high of 154,800 won, Hanwha Engine was down 65.2% from 94,400 won, and Hanwha Systems was down 64.5% from 184,000 won.
In Hanwha Ocean’s stock discussion forum, investors welcomed the new order. One investor wrote regarding the contract to build U.S. warships, “It’s amazing that Korea is even getting orders for U.S. warships.” Another investor expressed relief, saying, “For the first time in a month, I haven’t had to hold my breath this morning.”
On the other hand, some investors expressed disappointment that they had not yet recovered their previous losses despite the sharp rise in the stock price. One investor said, “I’m grateful for today’s rebound, but I wonder when the stock price will return to normal,” while another wrote, “With my high average purchase price, all I can do is watch from the sidelines.”
