Analysis of Hanwha Group's U.S. Shipbuilding Strategic Layout and Global Competitive Landscape

Based on the latest market data and strategic dynamics analysis, I will systematically elaborate on Hanwha Group’s strategic layout for expanding U.S. shipbuilding capacity and its implications.

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Hanwha Ocean announced a strategic investment in the U.S. Philly Shipyard in 2024, with an initial investment of over

for renovation and expansion. In August 2025, Hanwha announced an additional investment of for a comprehensive upgrade of the core infrastructure at Philly Shipyard [1][2].

According to the latest plan, the annual shipbuilding capacity of Philly Shipyard will be significantly expanded from the current 1-1.5 ships to

. This capacity leap will make the shipyard one of the most important commercial and military vessel construction bases on the U.S. East Coast [1].

Hanwha Group’s layout in the U.S. market is characterized by diversification:

Cooperation Field	Partner	Project Content	Strategic Significance
MRO Services	Vigor Marine Group (August 2025)	Vessel Maintenance, Repair, and Operations	Gain access to the U.S. Navy’s logistics support system
Design and Supply	NASSCO Shipyard (December 2025)	Vessel design and component supply	Integrate upstream industrial chain resources
Maintenance Contract	U.S. Navy Military Sealift Command	Mid-term maintenance of USNS Amelia Earhart	First Korean mid-sized shipyard to enter the U.S. Navy’s MRO market
Tanker Project	U.S. Navy Fleet	USNS Wally Schirra, USNS Yukon	Gain experience in military vessel construction

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Hanwha Ocean (Stock Code: 042660.KS) achieved remarkable valuation growth between 2024 and 2025:

• Stock Price Performance
  : Surged from 45,000 Korean won in early 2024 to 141,000 Korean won in October 2025, representing an increase of over
  200%
  [3]
• Market Capitalization
  : Grew from approximately $8.5 billion to
  $26.6 billion
  , a more than three-fold increase [3]
• Enterprise Value (EV)
  : Rose from $2.96 billion in 2022 to $27.59 billion in 2025, an over nine-fold increase [3]

Based on the latest data as of September 2025 [3]:

Financial Indicator	TTM (September 2025)	2024 Fiscal Year	2023 Fiscal Year	Year-over-Year Change
Revenue	$9.02 billion	$7.89 billion	$5.67 billion	+59%
EBITDA	$870 million	$340 million	$50 million	+1500%
Net Profit	$860 million	$390 million	$120 million	+600%
Total Assets	$13.23 billion	$12.11 billion	$10.82 billion	+22%
Total Orders	$9.8 billion	-	-	Exceeded target

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The global shipbuilding industry is undergoing profound structural reshaping. According to data from Clarkson Research [5][6]:

Year	China	South Korea	Japan	Others
2020	43%	27%	15%	15%
2022	52%	24%	12%	12%
2024	60%	22%	10%	8%
2025	63%	21%	8%	8%

According to the latest data [5][6]:

• China: 74.49% (secured 71 vessels, totaling 2.13 million CGT)
• South Korea: 15.22% (secured 11 vessels, totaling 440,000 CGT)
• Japan: 4.00% (secured 6 vessels, totaling 110,000 CGT)

• China: 60.38% (3,993 vessels, 99.5 million CGT)
• South Korea: 20.92% (672 vessels, 34.48 million CGT)
• Japan: 8.10% (746 vessels, 1.33 million CGT)

South Korea’s shipbuilding industry faces the following major pressures:

1. Declining Order Share
   : Dropped from 27% in 2020 to 21% in 2025, a nearly 6 percentage point loss
2. Intensified Competition from China
   : Lags far behind in bulk carriers (China’s share exceeds 80%) and container ships (China’s share 68%)
3. Laggard Capacity Expansion
   : South Korea has been relatively conservative among the 191 global capacity expansion projects from 2021 to 2025
4. Policy Pressure
   : U.S. Section 301 investigation and tariff policies have impacted order flows

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In August 2025, during South Korean President Lee Jae Myung’s visit to the U.S., he reached a

strategic partnership agreement with the Trump administration [7][8]:

• Investment Scale
  : South Korea committed to investing
  $150 billion
  in the future to support the reconstruction of the U.S. shipbuilding industry
• Tariff Exchange
  : South Korea secured a 15% tariff on exports to the U.S. (lower than the initially threatened 25%)
• Core Content
  : Technology transfer, joint shipbuilding ventures, and military vessel maintenance, repair, and operations (MRO) cooperation

The U.S. government is promoting the revival of its shipbuilding industry through multi-level policies:

Policy/Act	Time	Objective
Ship and Port Infrastructure Prosperity and Security Act (SHIPS Act)	Reintroduced in April 2025	Inject federal funding and incentives into shipyards and ports
U.S. Maritime Sustainability Restoration Framework	March 2025	Revitalize commercial and military shipbuilding
Jones Act Amendment Discussions	Ongoing	Allow partial foreign investment in domestic vessel operations

The MASGA initiative faces multiple obstacles [7]:

1. Legal Restrictions
   : The Burns-Tollefsen Amendment prohibits the construction of U.S. Navy vessels in foreign shipyards
2. Jones Act Restrictions
   : Prohibit the use of non-domestically built vessels for cargo transportation between U.S. ports
3. Skilled Labor Shortage
   : The U.S. domestic shipbuilding workforce lacks sufficient skills, requiring large-scale training
4. Policy Uncertainty
   : Policy fluctuations under the Trump administration may affect long-term investment returns

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• Market Diversification
  : Reduce dependence on the Chinese market and mitigate geopolitical risks
• Endorsement of Technology
  : Gain endorsement from U.S. Navy orders and enhance global brand influence
• Valuation Re-rating
  : Access to the U.S. market brings a valuation premium, with the stock price rising 200% in 2025
• Industrial Chain Integration
  : Full-chain layout from design to MRO creates synergistic effects

• Investment Return Cycle
  : The $5 billion investment will take 5-10 years to generate stable returns
• Policy Dependence
  : Highly reliant on U.S. government policy support, posing policy risks
• Profit Margin Pressure
  : Profit margins for military vessel construction are typically lower than those for civilian merchant ships

Hanwha Group’s U.S. layout is reshaping the competitive strategy of South Korea’s shipbuilding industry:

1. Differentiated Competition
   : Avoid direct competition with China in the merchant ship sector and shift to high-value-added military vessels
2. Technology Export
   : Expand international influence through technology transfer and joint venture models
3. Supply Chain Restructuring
   : Transfer some low-value-added segments to the U.S. while retaining high-value-added segments domestically

Impact Dimension	Short-term (1-2 Years)	Mid-to-Long-term (3-5 Years)
Market Share	South Korea maintains a 20-22% share	May rebound to 25%
Competition Focus	Competition for merchant ship orders	Competition in military vessels and technical services
Industrial Chain	East Asia-dominated landscape continues	Accelerated integration of U.S.-South Korea industrial chains
Policy Variables	U.S. tariffs affect demand	Trade policy risks are gradually digested

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According to PitchBook and public market data [3][4]:

Valuation Indicator	Value	Industry Comparison
Price-to-Earnings (P/E)	Approximately 42x	Average of South Korean manufacturing industry is approximately 15x
EV/EBITDA	Approximately 31.7x	Average of the shipbuilding industry is approximately 10x
Price-to-Book (P/B)	Approximately 2.8x	Average of the South Korean stock market is approximately 1.2x
Dividend Yield	Approximately 0.8%	Lower than the market average

• Growth expectations brought by U.S. market expansion
• High-profit margin premium from military vessel orders
• Geopolitical dividend from increasing global defense spending
• “National Team” effect supported by the South Korean government

• Uncertainty in order conversion (whether the $9.8 billion in orders can be converted into revenue)
• Potential investment losses caused by changes in U.S. policies
• Cyclical downward risk in the global shipbuilding industry
• Price competition pressure from China’s shipbuilding industry

Dimension	Assessment	Explanation
Growth	High	U.S. expansion brings significant incremental market
Profitability	Medium-High	Profit margins for military vessels are higher than those for merchant ships
Valuation Rationality	Neutral to Overvalued	Current price already reflects most optimistic expectations
Risk Level	Medium-High	High degree of policy dependence
Investment Rating	Hold	It is recommended to wait for order fulfillment signals before increasing positions

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1. Hanwha Group’s U.S. shipbuilding layout is a strategic market expansion
   : Through the acquisition and expansion of Philly Shipyard and diversified cooperation models, it has successfully entered the U.S., the world’s largest military vessel market.

2. Valuation growth reflects market recognition of strategic transformation
   : The 200% stock price increase in 2025 indicates investors’ optimistic expectations for Hanwha’s transformation from traditional merchant ships to high-value-added military vessels.

3. The global shipbuilding competitive landscape is being reshaped
   : China’s market share has risen from 43% to 63%, and South Korea faces continued pressure of declining order shares; exploring the U.S. market is a key strategy for South Korea’s shipbuilding industry to cope with competition from China.

4. The MASGA initiative faces policy uncertainty
   : Although South Korea has committed to a $150 billion investment, U.S. protectionist laws (Jones Act, Burns-Tollefsen Amendment) may limit the depth of actual cooperation.

: Hanwha successfully increases Philly Shipyard’s capacity to 20 ships per year, secures bulk orders from the U.S. Navy, and its stock price is expected to exceed 180,000 Korean won.

: Capacity expansion proceeds as planned, MRO business contributes stable profits, and the stock price remains in the range of 120,000-150,000 Korean won.

: U.S. policies tighten or orders are delayed, investment returns fall short of expectations, and the stock price may drop below 80,000 Korean won.

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[1] Eworldship - “South Korean Shipyards Accelerate U.S. Shipbuilding Market Layout; Hanwha to Collaborate with U.S. Navy on New Frigate Construction” (December 25, 2025) https://www.eworldship.com/html/2025/ShipbuildingAbroad_1225/217421.html

[2] Taiwan Institute of National Defense and Security Research - “Analysis of Recent South Korean Investments in the U.S. Shipbuilding Industry” (September 12, 2025) https://indsr.org.tw/respublicationcon?uid=12&resid=3024&pid=5613

[3] PitchBook - “Hanwha Ocean 2026 Company Profile: Stock Performance & Earnings” https://pitchbook.com/profiles/company/124352-38

[4] Investing.com - “Hanwha Ocean Co Ltd Stock Price Today” https://www.investing.com/equities/daewoo-shipbuilding

[5] China Ship Trading Network - “97 Vessels! Orders Plunge! Latest Monthly Report on the Global Shipbuilding Industry Released” (August 25, 2025) https://www.cn-eship.com/news/newsinfo.jsp?id=225396

[6] iMarine - “Clarkson Research | Annual Summary: Newbuilding Market – A Year of Stress Testing” (January 4, 2026) https://www.imarine.cn/212626.html

[7] BISI - “Make American Shipbuilding Great Again: The US-South Korea Deal” (September 12, 2025) https://bisi.org.uk/reports/make-american-shipbuilding-great-again-the-us-south-korea-deal

[8] RAND - “Collaborating Toward a Shipbuilding Renaissance” (October 2025) https://www.rand.org/pubs/commentary/2025/10/collaborating-toward-a-shipbuilding-renaissance.html