Korea Shipbuilding: Canada CPSP countdown; sentiment washed out, but risk/reward improving

Research evidence excerpt

Korea Shipbuilding: Canada CPSP countdown; sentiment washed out, but risk/reward improving

J P M O R G A N Asia Pacific Equity Research

23 June 2026

Korea Shipbuilding

Canada CPSP countdown; sentiment washed out, but

risk/reward improving

Canada is expected to name a preferred bidder by end-June for its next-generation Korea Shipbuilding

ACsubmarine procurement, with market speculation around a delay and/or a split Simon Han

award still in play. The contest is framed as Team Korea vs. TKMS, with the (82-2) 758-5711

headline differentiations increasingly framed as a trade-off between industrial simon.x.han@jpmorgan.com

cooperation, delivery time, NATO interoperability/common-fleet benefits, and J.P.BranchMorgan Securities (Far East) Limited, Seoul

technology transfer. Into the decision, share price performance suggests markets

Jeongsuk Woo

are leaning towards a neutral-to-negative outcome for Korea (Hanwha Ocean and (82-2) 758 5703

HHI down 18-19% over 5 days vs. KOSPI -6% while TKMS is down 1%), but we jeongsuk.woo@jpmorgan.com

see improving risk/reward after Hanwha Ocean’s valuation reset with 2027E P/E J.P. Morgan Securities (Far East) Limited, Seoul

Branch

(based on Street 2027E EPS) at 16.6x, now broadly in-line with HHI at 17.0x.

Beyond Canada, we continue to like both names into 1) a potentially supportive 2Q Karen Li, CFA

(852) 2800-8589

earnings backdrop (FX, working days), and 2) US Navy-related update flow; karen.yy.li@jpmorgan.com

Hanwha Ocean remains our top pick followed by HHI. We also note that Hanwha J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Aerospace is a key beneficiary upon a Korea win with a potential for orders of 98 Morgan Broking (Hong Kong) Limited

units of howitzers and 250 units of IFVs as part of the industrial cooperation

package.