Hanwha Aerospace Co. experienced a significant drop in its stock price following the announcement of a plan to raise $2.5 billion through a share sale, marking South Korea's largest such offering in over three years. The company intends to issue nearly 6 million shares at a price of 605,000 won each, representing a 16% decrease from the previous closing price. South Korea's financial regulator is set to review this plan due to its substantial scale.

The move to raise funds comes as Hanwha capitalizes on the growing demand for defense stocks, with its shares performing exceptionally well in 2024. The company aims to use the raised capital for extensive investments to achieve revenue and operating profit targets of 70 trillion won and 10 trillion won, respectively, by 2035. A significant portion of the proceeds will be allocated to investments in overseas facilities and stakes in foreign partners.

Expanding its presence in the defense industry, Hanwha anticipates increased demand for ground weapons, especially armored vehicles, amid heightened geopolitical tensions worldwide. The company plans to cater to potential customers in Europe and the Middle East with its range of weapons, including the K9 self-propelled howitzer.

Although the decision to invest in overseas plants appears strategic to capture larger opportunities, analysts have expressed concerns about the synergy of the shipyard investment. Some brokerage firms have adjusted their target prices for Hanwha Aerospace stock following the share sale announcement, with differing views on the necessity of raising capital through the stock market given the company's projected operating profits.