[Market Focus] HD Hyundai Heavy Industries Hits Record High on 33 Trillion Won Submarine Order

"One Team" Hanwha Ocean Also Surges Over 3%

Shipbuilding stocks such as HD Hyundai Heavy Industries and Hanwha Ocean showed strong gains in early trading. Investor sentiment appears to have been boosted by news that the two companies are participating as a unified team in a Canadian Navy submarine procurement project worth 33 trillion won.

As of 9:05 a.m. on May 7, HD Hyundai Heavy Industries (up 3.67%), HD Korea Shipbuilding & Offshore Engineering (up 2.70%), and HD Hyundai Marine Engine (up 1.20%) all reached new 52-week highs. Hanwha Ocean also started the day with gains of over 3%.

Previously, on May 5 (local time), CBC, the largest TV broadcaster in Canada, reported that three South Korean defense companies had submitted an unsolicited proposal to the Canadian government in early March this year. Among them, Hanwha Ocean and HD Hyundai Heavy Industries reportedly submitted a detailed joint proposal worth $20 billion to $24 billion (27.74 trillion won to 33.29 trillion won), promising to deliver the first four submarines by 2035.

An unsolicited proposal is a document that explains and suggests in advance key specifications, expected delivery schedules, and additional terms for Korean-made submarines. It is distinct from an official request for proposal (RFP). Currently, Canada is pursuing the 'Canadian Patrol Submarine Project' (CPSP), a project worth up to 60 trillion won to acquire 8 to 12 submarines of 3,000 tons each. The goal is to receive the first submarine by 2035.