Target prices from securities firms for Hanwha Ocean have been rising consecutively since the 29th. The expectation that the tariff impact will not be significant arose as the United States, engaged in a tariff war globally, requested cooperation from South Korea in the shipbuilding sector. First-quarter performance also exceeded market expectations (consensus).
Hanwha Ocean recorded sales of 3.1431 trillion won and an operating profit of 258.6 billion won in the first quarter of this year, marking increases of 37.6% and 388.5%, respectively, compared to the same period last year. While sales were similar to the consensus, operating profit significantly exceeded market expectations.
Byun Yong-jin, a researcher at iM Securities, noted, "Earlier, the surprise at HD Hyundai Heavy Industries was so great that there was some skepticism, but the surprise at Hanwha Ocean confirmed a rise in performance across the shipbuilding industry."
Nam Kyung-tae, a researcher at Korea Investment & Securities, said, "Excluding the currency effect of 30 billion won, the ordinary operating profit margin is 7.9%, and revenue from liquefied natural gas (LNG) carriers has rapidly increased," adding, "The institutional sector for special ships also recorded an operating profit margin of 13.6%."
Positive evaluations have also emerged regarding the future outlook for Hanwha Ocean. Hanwha Ocean announced through a public disclosure that it will invest 600 billion won to secure one floating dock and one offshore crane by 2027. This facility investment is expected to further enhance the capacity for large ship manufacturing.
Byun stated, "With one floating dock, it is possible to handle 5 to 6 general cargo ships annually," and explained, "The company seems to be betting on an increase in the amount of production after 2027."
Improvements in operating profit margins are also expected. Korea Investment & Securities projected that the operating profit margin in the commercial ship sector will rise to 15.6% by 2027. Considering the increase in ship prices, the operating profit margin for ships ordered in 2023 is expected to be 16%, while those ordered in 2024 are projected to be 20%, indicating an improvement in profitability.
Lee Jae-hyuk, a researcher at LS Securities, evaluated, "Hanwha Ocean seems to have shifted away from its previous cautious stance on expanding domestic production capacity and is now pursuing outward growth."
iM Securities adjusted its target price for Hanwha Ocean from the previous 67,000 won to 91,000 won, while LS Securities revised its target from 75,000 won to 90,000 won. However, Korea Investment & Securities stated it would provide investment opinions based on future ship order volumes.