Hanwha Ocean Misses Out on Canadian Contract... Why Its Target Price Was Cut 18%

[Financial News] Kiwoom Securities cut its target price for Hanwha Ocean Co., Ltd. by 18.2%, from 110,000 won to 90,000 won. It lowered its valuation of the company as further progress in overseas warship exports needs to be confirmed following the failure to win a Canadian submarine contract. However, analysts say the company’s medium- to long-term growth prospects remain intact, with new contract opportunities still available, particularly in the United States and Europe. The firm maintained its “Buy” rating.
Lee Han-gyeol, an analyst at Kiwoom Securities, said on the 28th that the price-to-earnings ratio (PER) used to calculate Hanwha Ocean Co., Ltd.’s target price had been lowered from 12 times to 10 times.
The failure to win a Canadian submarine contract has increased uncertainty around overseas defense projects, but further export opportunities remain, according to the analysis. Hanwha Ocean Co., Ltd. is seeking contracts for submarine and frigate projects in several countries and regions, including Thailand, Egypt, Greece, the Middle East, Chile and the Philippines.
The analyst forecast that “even after losing the Canadian submarine contract, the company has a pipeline of submarine and frigate projects in numerous countries and regions, including Thailand, Egypt, Greece, the Middle East, Chile and the Philippines,” adding that “if some of those projects lead to actual contract wins, expectations for exports that had been put on hold after the loss of the Canadian project will revive.”
Cooperation with the United States on warship exports is also worth watching. The United States is viewed as a pipeline of potential warship-export opportunities, and analysts expect Hanwha Ocean Co., Ltd. to benefit from future growth in related business because it owns Hanwha Philly Shipyard in the United States. However, whether this leads to actual contracts is key.
The analyst also forecast improved performance in the offshore plant segment. Production of the topsides for the floating production, storage and offloading facility (FPSO) ordered last year is set to ramp up, and related revenue is expected to increase starting next year. Further offshore plant contracts are also possible.
Kiwoom Securities forecast Hanwha Ocean Co., Ltd.’s revenue next year at 13.7 trillion won and operating profit at 2.294 trillion won. These figures represent increases of 16.9% and 69.6%, respectively, over this year’s estimates.
The analyst said that “the actual results of numerous pipeline projects awarded from late 2026 through 2028 are still pending,” and forecast that “the company’s value could be reassessed depending on its success in securing additional contracts.”
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