On the 7th, Hanwha Ocean shares plunged 22% after news spread that the company was not selected as the preferred bidder for Canada's next-generation submarine program (CPSP).
As of 9:13 a.m. that day, Hanwha Ocean was trading at 90,000 won on the Korea Exchange, down 26,100 won (22.48%) from the previous session.
That day, news broke that Thyssenkrupp Marine Systems (TKMS) of Germany was selected as the preferred bidder for the CPSP. Earlier, Hanwha Ocean's Jangbogo-III Batch II and Germany's TKMS 212CD had been competing for the CPSP order.
The CPSP is a project to procure up to 12 3,000-ton diesel-electric submarines to replace four aging Victoria-class submarines. The total project cost, including construction and more than 30 years of maintenance, repair and overhaul (MRO), is up to 60 billion Canadian dollars (about 60 trillion won).
However, analysts in the securities industry said the failure to win the CPSP order was based on geopolitical factors rather than performance, indicating that overseas competitiveness remains intact.
Lee Dong-heon, a senior analyst at Shinhan Investment & Securities, said, "What decided the outcome of this bidding war were geopolitical factors such as interoperability among NATO member states and the cohesion of Europe's defense supply chain, not performance," adding, "This experience will serve as a meaningful reference in follow-on projects, including Poland's Orka program, submarine exports to the Middle East and Southeast Asia, and MRO cooperation in North America."