Hanwha Ocean and HD Hyundai Heavy Industries formed a team and have been shortlisted for the Canadian submarine project 'CPSP'. They will compete with Thyssenkrupp Marine Systems of Germany.
Researcher Kang Kyung-tae of Korea Investment & Securities noted in a report, "A record export opportunity has emerged in the single offshore weapon system export project," and advised on the 27th to expand beyond Hanwha Ocean and HD Hyundai Heavy Industries to the supply chain as well.
CPSP aims to introduce up to 12 conventional submarines at a displacement of 3,000 tons (t). Researcher Kang explained that if the export price per ship is set at 1.3 trillion won based on the design standards of the Jangbogo III Batch-II, the new construction costs alone would total 16 trillion won. Considering the maintenance, repair, and operational (MRO) projects during the Canadian Navy's operation of the submarines, the total project cost could reach 60 trillion won.
Researcher Kang assessed that there is a high likelihood of selecting Hanwha Ocean and HD Hyundai Heavy Industries. This is because the Canadian government emphasized 'fast and accurate delivery'. The Canadian government demands the initial ship to be delivered by 2035.
Currently, Hanwha Ocean can simultaneously build two submarines per year. If the expansion construction is completed, the annual construction capacity will increase to five vessels. HD Hyundai Heavy Industries can also produce one vessel every two years based on the delivery timeline. In particular, three Jangbogo III Batch-I submarines built by the two shipyards have been commissioned into the Korean Navy, and the first vessel of Jangbogo III Batch-II, being built by Hanwha Ocean, is also expected to be launched soon.
Researcher Kang explained that if this project is awarded in a lump-sum turn-key manner, where the contractor is responsible for design, procurement, construction, commissioning, and post-management, the entire supply chain for submarine production will benefit. This includes STX Engine, which produces diesel gensets (engine + generator), and Bumhan Fuel Cell, which manufactures AIP modules. Kang emphasized that most domestic defense companies related to combat systems and weapon systems are also beneficiaries.
Researcher Kang said, "Since CPSP is not a project where market share can be assumed, it cannot be reflected in performance estimates or corporate value, but stock prices will react first in anticipation of the final contractor selection."