Hanwha Ocean Loses Canadian Submarine Bid; Cosmetics and Consumer Names Seen Closing a Valuation Gap
Canada selected Germany's ThyssenKrupp Marine Systems as preferred bidder for its submarine program over Hanwha Ocean. Both sides reportedly passed technical evaluation, but Germany prevailed on broader NATO alliance security ties and more favorable delivery terms tied to existing supply commitments to Canada and Norway. ThyssenKrupp shares surged over 10% in Germany, while Hanwha Ocean plunged about 23% to around 86,600 won, a level last seen roughly a year ago.
Panelists called the 23% drop excessive given Hanwha Ocean's recent success winning a Korean destroyer contract and its continued leading role in other shipbuilding orders and the U.S.-linked MASGA initiative. They noted that if Germany's dock and production capacity becomes saturated from this contract, Korea could be better positioned for future orders. The announcement's timing just ahead of the NATO summit was also flagged as notable.
As large-cap semiconductor names corrected, non-AI consumer sectors including cosmetics, department stores, hotels, casinos and convenience stores rallied. Clio rose over 10%, Amorepacific gained about 5%, and Samyang Foods surged nearly 9%. Notably, U.S.-bound cosmetics exports grew despite tariff concerns on small parcels, a positive sign for the sector.
Citing an SK Securities report, panelists noted a widening gap between cosmetics export growth and the sector's stock index performance, with share prices historically lagging exports before eventually converging. With the semiconductor concentration easing, they suggested this could be an opportune entry point for consumer names, most of which won't report earnings until late July or August.