Hanwha Ocean rose more than 13% early on the 6th. Buying appears to be gathering ahead of the final announcement in the bid to win Canada's Canadian patrol submarine project (CPSP), which could be worth up to 60 trillion won.
As of 9:17 a.m. on the 6th, Hanwha Ocean was trading at 120,800 won on the Korea Exchange, up 13,900 won (13%) from the previous session.
Canadian leading daily the Globe and Mail reported that Prime Minister Mark Carney plans to officially announce on the 6th (local time) the final contractor that secured the CPSP contract between Korea and Germany.
The CPSP is a large project to introduce up to 12 diesel submarines to replace the Royal Canadian Navy's aging Victoria-class submarines.
When the cost to build the new submarines is combined with maintenance, repair and operations (MRO) expenses over the next 30 years, the total project size is said to reach up to 60 trillion won. Domestic corporation Hanwha Ocean and Germany's ThyssenKrupp Marine Systems (TKMS) have been shortlisted as final candidates and are locked in a fierce contest.
In the securities industry, the view was that the outcome of the order would have a significant impact on Hanwha Ocean's mid- to long-term earnings.
Kim Yong-min, an analyst at Yuanta Securities Korea, said, "If Hanwha Ocean is confirmed to win the CPSP project, operating profit from the project could average more than 500 billion won annually from 2032 to 2043, and more than 300 billion won annually from MRO after 2044."