Hanwha Ocean (042660.KS) rose sharply after U.S. President Donald Trump allowed foreign companies that invest in the U.S. shipbuilding industry to build up to two American warships at their home shipyards. Analysts said expectations that Hanwha, which owns the Philly Shipyard in Philadelphia, could directly benefit from the move lifted investor sentiment.
Hanwha Ocean closed at 95,800 won, up 5,100 won, or 5.62%, from the previous session, according to the Korea Exchange. The stock opened more than 4% higher and at one point surged more than 9% to 99,500 won during the day.
Trump signed a national security memorandum on rebuilding the U.S. Navy and the shipbuilding industrial base on the 13th, local time. At its core, the measure allows foreign shipbuilders that build a new shipyard in the U.S. or acquire ownership or a majority stake in an existing U.S. shipyard to produce up to two vessels at their home shipyards. Eligibility is limited to three ship classes: surface combatants, combat logistics fleet oilers and roll-on/roll-off ships.
Any vessels beyond the initial two, however, must be built in the U.S. Foreign companies must hire and train American workers while transferring production methods and technology from their home shipyards to U.S. sites and using American supply chains. The approach applies a national security waiver to the Burns-Tollefson Act, which has in principle restricted the overseas production of U.S. warships.
Hanwha is cited as a Korean company that meets the conditions of the measure. Hanwha Ocean and Hanwha Systems acquired the Philly Shipyard in late 2024 with a combined investment of $100 million. Hanwha later announced plans to inject an additional $5 billion into expanding local facilities and workforce and to transfer production technology from its Korean shipyards. As a result, observers have raised the possibility of a business model in which Hanwha secures initial orders at its Geoje plant before transferring the related technology to the Philly Shipyard.
Hanwha Ocean is already expanding its push into the U.S. specialized vessel market. Daishin Securities said Hanwha Ocean has won orders for two missile range instrumentation vessels (MRIVs), and that under the existing framework a collaborative structure is expected in which the Philly Shipyard handles construction while Hanwha Ocean takes charge of design and production. The brokerage said synergy between the two shipyards would also be possible if orders for combat support vessels come in. Analysts said the latest deregulation, by making domestic production possible as well, could further broaden the company's business options.
Its core business is also improving. Hanwha Ocean posted second-quarter revenue of 5.4432 trillion won, up 65.2% from a year earlier, while operating profit more than doubled to 736.1 billion won. The commercial vessel division's operating margin reached 22.7% in particular. Analysts attribute the higher profitability to expanded recognition of revenue from high-priced LNG carriers, productivity gains from repeat construction and cost reductions. DB Securities also said that, alongside the improvement in commercial vessel results, U.S.-driven specialized vessel orders are gradually taking shape.
