NH Investment & Securities raised the target price for Hanwha Ocean to 125,000 won, an increase of 13.6% from the previous estimate. This adjustment was made alongside a general upward revision of the operating profit estimates for this year and through 2027. The investment recommendation remains "buy."
On the 30th, NH Investment & Securities released a report on Hanwha Ocean titled "Rising profitability and business expansion expectations," revising the operating profit estimate for this year upward by 27%. Additionally, the operating profit estimates for next year and 2027 were also increased by 21% and 10%, respectively.
According to NH Investment & Securities, Hanwha Ocean recorded a revenue of 3.29 trillion won in the second quarter, a 29.9% increase from the same period last year, marking an earnings surprise. The operating profit also turned positive. Notably, the company secured $3.2 billion worth of contracts by the end of June.
Jeong Yeon-seung, a researcher at NH Investment & Securities, noted, "Despite excluding the favorable exchange rate and one-time gains (50 billion won), the profitability in the shipping sector was higher than expected," adding, "The current exchange rate is high compared to the time of order placement, leading to increased profitability, particularly in LNG carriers."
The expectation that the shipbuilding industry will be utilized as a key strategy in the tariff negotiations between the U.S. and Korea is also cited as a factor boosting the anticipation for Hanwha Ocean's stock price increase. This is due to the high possibility of expanding business areas into merchant ships and naval vessels.
The researcher stated, "The current stock price of Hanwha Ocean is 96,800 won based on the previous day's closing price, trading at a price-to-earnings ratio (PER) of 19.2, considering the forecast for 2027 net profit," and added, "Given the potential for business expansion, additional valuation increases are also possible."