Hanwha Ocean's shares have dropped more than 22% following news that the company failed to secure a contract for Canada's next-generation submarine program (CPSP).
As of 9:38 a.m. on July 7, Hanwha Ocean's stock was trading at 90,100 won, down 26,000 won (22.39%) from the previous trading day. The stock experienced a sharp decline early in the session, triggering a volatility interruption mechanism.
The drop in stock price is attributed to the Canadian government's selection of ThyssenKrupp Marine Systems (TKMS) as the preferred bidder for the next-generation submarine program. Hanwha Ocean had partnered with HD Hyundai Heavy Industries in the bidding process but was ultimately unsuccessful in being selected as the preferred bidder, leading to a deterioration in investor sentiment.
On July 6, Canadian Prime Minister Mark Carney announced that TKMS had been chosen as the preferred bidder for the construction of 12 submarines, which includes maintenance and operation over the next 30 years. However, he noted that if negotiations with TKMS fail, Hanwha Ocean would retain the right to negotiate as the next in line.
Kang Kyung-tae, a researcher at Korea Investment & Securities, stated, "A temporary stock shock is inevitable following the news of the failed bid, but considering the upcoming second-quarter earnings report scheduled for the end of this month and expectations for shipbuilding investments in the U.S., the decline may gradually recover."
* This article has been translated by AI.
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