Catenaa, Friday, March 21, 2025- Hanwha Aerospace, one of Asia’s top-performing stocks this year, dropped by more than 12% on Friday, after disclosing a plan to raise $2.5 billion, which is South Korea’s biggest share sale in more than three years.
Shares of the South Korean weapons and rocket maker fell as much as 12.33% in Korea Stock Exchange on Friday as the plans to issue almost 6 million shares at 605,000 won apiece.
Known for its ability to deliver weapons faster and cheaper than rivals, Hanwha Aerospace has been seen as a beneficiary of increased military spending. The stock is still up 93.87% this year, with help from Europe’s plan to mobilize up to $867 billion for defense spending.
Hanwha Aerospace plans large-scale investments with the proceeds of its offering, as it aims for revenue of $48 billion by 2035.
South Korea’s financial regulator said it will review the plan, citing the scale of the offering. Several brokers cut their price targets for the stock after the share sale plan.
Even with Friday’s drop, the stock is still one of the top performers on the regional benchmark MSCI Asia Pacific Index. Another Korean defense stock Hyundai Rotem Co. is No. 1 on the gauge, up 125% in 2025.
Hanwha Aerospace sees demand for ground weapons rising amid mounting geopolitical tensions that are pushing countries to raise their national defense budgets. The company, whose weapons include the K9 self-propelled howitzer, said it will respond to requests from potential customers in Europe and the Middle East.
Earlier this week, the company said it bought a 9.9% stake in Australian shipbuilder Austal Ltd and seeks to raise its holding in the US Navy contractor to 19.9% to strengthen strategic partnerships in the US and elsewhere.
