[Click eStock] HSD Engine, Order Backlog Expected to Increase by 1 Trillion Won, 'Upward Trend'

[Asia Economy Reporter Lee Seon-ae] Hana Financial Investment maintained its investment opinion of 'Buy' and a target price of 14,000 KRW for HSD Engine on the 26th.

Park Moo-hyun, a researcher at Hana Financial Investment, explained, "The increasing order backlog of HSD Engine will lead to a steady upward trend in the stock price," adding, "Furthermore, as the shipyards' order performance continues, it is also reasonable to consider the possibility that HSD Engine's operating performance may exceed estimates."

Since October last year, when the Korean won began to strengthen, the ship order performance of Korean shipyards has continued daily, and HSD Engine's ship order backlog has also been increasing. The order backlog of HSD Engine, which was around 830 billion KRW at the end of the third quarter last year, has recently increased to over 900 billion KRW, and as the shipyards' order performance continues, HSD Engine's order backlog will exceed 1 trillion KRW. European major shipowners are increasing technical requirements to shipyards beyond LNG propulsion specifications to methanol, ethanol, LPG, and, in the mid-to-long term, ammonia propulsion specifications, so the technical demand for ship engines will continue to change.

This means that ship replacements will not happen all at once but will continue multiple times, so the speed of increase in HSD Engine's ship order backlog will become even steeper.

HSD Engine's major shareholder's holdings were released to the market in the form of a block deal, causing a significant drop in HSD Engine's stock price. Since the reduction of the major shareholder's holdings, which had already been known to the market, has been completed, it is judged that there will be no further block deals of major shareholder holdings. With the resolution of the overhang issue of HSD Engine shares that had been raised, it is judged that there is no downside risk to the stock price due to non-business factors.