[Click eStock] "HSD Engine, Anticipated Boost from Qatar LNG Ship Orders"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating and a target price of 14,000 KRW for HSD Engine on the 9th. This is based on the judgment that HSD Engine's ship engine order performance will also increase as shipyards' order performance shows a strong trend.

After the final investment decision (FID) was made last month for a new 30 million-ton LNG onshore plant project in Qatar, Samsung C&T recently secured the Qatar LNG onshore plant project alone, worth 1.8 trillion KRW. Accordingly, it is expected that news of orders for about 130 Qatar LNG carriers will be announced soon.

Park Muhyun, a researcher at Hana Financial Investment, explained, "Considering that the onshore plant order contract is executed within one month after the FID decision and the order contract for carriers takes about 3 to 6 months, we can expect to hear news of Qatar LNG carrier contracts from Korean shipyards between the 2nd and 3rd quarters of this year." Since the Qatar LNG carrier project has been discussed for a long time, it is presumed that a significant part of the preparation process for ship orders has already been completed.

The total ship order performance announced by listed shipyards in February this year was about 4.2 billion USD, achieving 14% of this year's order plan. With the Korean won expected to remain strong and the Qatar LNG project progressing smoothly, domestic shipyards are expected to achieve order volumes exceeding their business plans this year.

Researcher Park said, "This also means that HSD Engine's ship engine order performance will increase together, and considering HSD Engine's order performance trend, it will reach about 900 billion to 1 trillion KRW by the end of the year," adding, "Including Qatar LNG carriers, it will significantly exceed 1 trillion KRW."