[Click eStock] "Korea Shipbuilding & Offshore Engineering, Order Momentum Inevitably Slows Down"

Achieved approximately $21.09 billion in new orders from January to August this year
KB Securities "Korea Shipbuilding & Offshore Engineering target price lowered from 160,000 KRW to 135,000 KRW"

[Asia Economy Reporter Gong Byung-sun] Korea Shipbuilding & Offshore Engineering has achieved cumulative new orders exceeding 24 trillion won this year. However, with a sufficient order backlog secured, a slowdown in future order momentum is expected to be inevitable.

On the 27th, KB Securities maintained a 'Buy' rating on Korea Shipbuilding & Offshore Engineering but lowered the target price from 160,000 won to 135,000 won. The closing price on the 24th was 102,000 won.

Korea Shipbuilding & Offshore Engineering's performance exceeded expectations. From January to August this year, the company secured new orders totaling $21.09 billion, including $17.71 billion (approximately 20.8624 trillion won) in shipbuilding, $1.77 billion in offshore plants, and $1.58 billion in engine machinery. This represents 129.5% of the initial business plan target of $16.75 billion. As of the end of August, the order backlog stood at $28.27 billion for shipbuilding and $1.83 billion for offshore, totaling $33.08 billion, which corresponds to 2 years and 6 months of work compared to this year's planned sales.

(Provided by KB Securities)

This achievement was driven by large orders for container ships and liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers. Up to last month, Korea Shipbuilding & Offshore Engineering secured a total of 58 container ships, and contracts for 26 LNG carriers and 48 LPG carriers. In the same period last year, there were no container ship orders, and only 6 LNG carriers and 8 LPG carriers were ordered.

However, the slowdown in order momentum due to securing the order backlog is expected to impact the stock price going forward. Having achieved the annual order target early, future order strategies are expected to shift to selective orders focused on profitability with premium clients.

Jung Dong-ik, a researcher at KB Securities, explained, "With a sufficient order backlog secured, a slowdown in future order momentum is inevitable. Now is the time to focus on the rise in new ship prices and the direction of raw material prices."