MHI climbs 5% after first ever warship export deal

Key Points:

• Mitsubishi Heavy Industries (MHI), Japan's largest defense company, saw its shares rise nearly 4% after Japan finalized a $7.15 billion deal with Australia to build three general purpose frigates, marking Japan's first-ever warship export project.
• The first frigate, based on the upgraded Mogami-class design, is scheduled for delivery to the Royal Australian Navy in 2029, with Australia committing up to AU$20 billion for a fleet of 11 frigates to replace the aging ANZAC-class vessels.
• MHI won the contract over German rival ThyssenKrupp Marine Systems, partly because Australia could receive the upgraded warships ahead of Japan's own navy, according to Australian sources.
• Other Japanese companies involved in the project include NEC Corporation, Mitsubishi Electric, and Hitachi, supplying radar, antenna, and other systems; shares of Mitsubishi Electric and Hitachi rose following the announcement, while NEC shares dipped slightly.
• Australia's National Defence Strategy highlights concerns over China's growing military power and maritime claims in the Indo-Pacific, noting increased and sometimes unsafe PLA intercepts of foreign military vessels and aircraft in international waters.