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NATIONAL HARBOR, Md. - Huntington Ingalls Industries (NYSE: HII) and HD Hyundai Heavy Industries (HHI), two prominent players in the global shipbuilding industry, have entered into a memorandum of understanding (MOU) today to explore collaborative efforts aimed at enhancing ship production. The MOU, signed at the Sea Air Space expo, seeks to bolster both defense and commercial shipbuilding. HII’s stock, currently trading at $184.95, has experienced significant market pressure with a 26.8% decline over the past six months, according to InvestingPro data.
The agreement was formalized by Brian Blanchette, HII Executive Vice President and President of Ingalls Shipbuilding, and Won-ho Joo, chief executive of the naval & special ship business unit at HHI. The partnership is set to combine the strengths of both companies to foster technological advancements, improve production efficiency, and reinforce the defense industry’s capabilities.
Blanchette emphasized the importance of the MOU in expanding the U.S. shipbuilding capacity to support national security, while Joo highlighted the opportunity for both companies to enhance their shipbuilding expertise and provide increased value to their customers.
The collaboration between HII and HHI is expected to strengthen the maritime industrial base of both the United States and South Korea. This strategic move aligns with HII’s mission to deliver powerful ships and defense solutions, leveraging its 135-year history in advancing U.S. national security. HII’s diverse capabilities span from shipbuilding to unmanned systems and synthetic training, with a workforce of 44,000. The company has demonstrated strong shareholder commitment, maintaining dividend payments for 14 consecutive years with a current yield of 2.92%.
HHI, recognized as the world’s leading shipbuilder with a market share of approximately 10%, has delivered over 2,300 ships to various shipowners worldwide. The company’s extensive experience in naval shipbuilding positions it as a key player in the industry.
The partnership outlined in the MOU is expected to have a significant impact on the efficiency and innovation within the shipbuilding sector. This information is based on a press release statement.
In other recent news, HII has achieved a significant milestone by selling over 700 REMUS uncrewed underwater vehicles globally, reinforcing its position as a leading producer in maritime technology. In addition to this, HII has secured a $147 million contract to deliver comprehensive training support services to the U.S. Navy, enhancing the readiness of the Navy’s combat training systems. The company is also set to develop a High-Energy Laser weapon system prototype for the U.S. Army, focusing on neutralizing enemy unmanned aircraft systems. Furthermore, HII is manufacturing small uncrewed undersea vehicles for the U.S. Navy’s Lionfish System program, with a contract valued at over $347 million.
These recent developments demonstrate HII’s ongoing commitment to advancing defense capabilities. Meanwhile, Stephen Feinberg has been confirmed as the Deputy Secretary of Defense, where he aims to improve the Department of Defense’s cost structure and efficiency. Feinberg has emphasized the importance of strengthening the defense industrial base and improving the supply chain. In another sector, Cantor Fitzgerald has expressed a positive outlook for the government technology and space sector, despite potential near-term volatility. The firm highlights that undervaluation in this sector presents long-term investment opportunities.
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