Speco Wins KRW 4.6 Billion Contract with Hanwha Ocean for Naval Steering Gear
Speco has secured a contract worth KRW 4.6 billion with Hanwha Ocean to supply steering gear and other components for naval vessels. The contract period spans from September 11, 2025, to December 31, 2029, totaling 4 years and 3 months. This represents approximately 14.3% of Speco’s 2024 revenue, suggesting a substantial contribution to revenue growth.
Contract Significance: Boosting Marine Machinery Business and Profitability
This contract is projected to positively impact Speco’s marine machinery business. The nature of the defense and offshore plant business typically commands high margins, potentially leading to improved profitability. Additionally, supplying components for naval vessels strengthens Speco’s position in the military and specialized ship markets, contributing to future growth momentum.
Key Investment Highlights
- Accelerated growth in marine machinery: Increased orders are anticipated based on advanced technologies like stabilized steering gear.
- Stable revenue stream: The 4-year and 3-month contract duration provides a stable revenue base.
- Improved profitability potential: Supplying military components offers higher margins, contributing to overall profitability improvement.
Risk Factors and Investment Considerations
Volatility in the construction market and sluggish performance in the wind power business remain risk factors. Furthermore, diversification efforts are necessary to reduce reliance on specific customers. Investors should consider these factors comprehensively when making investment decisions.
FAQ
What is the contract value between Speco and Hanwha Ocean?
KRW 4.6 Billion.
How will this contract impact Speco?
It is expected to boost Speco’s marine machinery business, contribute to stable revenue, and improve profitability.
What are Speco’s main business segments?
Construction machinery, marine machinery, and wind power.
