Hanwha Aerospace shares drop 15% after rights issue

Shares of Hanwha Aerospace, a major South Korean defense company, dropped nearly 15% on Friday. This decline came after the company announced a significant rights offering worth about $2.5 billion on Thursday. Hanwha plans to issue more than 5.95 million new shares at a price of 605,000 won each. Once these shares are listed on June 24, they will increase the total number of shares by about 13.05%. The funds raised will be used for investments in both local and international defense facilities. Additionally, the company will invest in shipbuilding and drone engines. Hanwha aims to enhance its global presence within the aerospace, shipbuilding, and defense industries. The firm has seen its shares rise nearly 90% in early 2025, driven by expectations of increased defense spending. It projects a revenue growth of around 330% by 2035 and a 210% rise in operating profits from 2024 levels. The company produces various military equipment, such as artillery and air defense systems. It is notably the largest exporter of the K9 Thunder self-propelled howitzer, with customers including Poland, India, and Turkey. Analysts suggest that the appeal of South Korean arms lies in being cost-effective and quicker to produce, making them strong competitors against premium international offerings.