[Click eStock] "HMM, Long Way to Go for Sale... Investment Opinion 'Neutral'"

[Asia Economy Reporter Son Sunhee] Daishin Securities raised the target price for HMM from 20,000 KRW to 22,000 KRW on the 20th. However, the investment opinion was maintained at 'Neutral (Marketperform, expecting stock price fluctuations of -10 to 10 percentage points compared to market returns over the next 6 months)'.

HMM's operating profit in the fourth quarter of last year recorded 1.2589 trillion KRW, in line with market estimates. Despite a sharp drop in short-term (Spot) freight rates, high long-term fixed contract (SC) freight rates are analyzed to have protected profitability.

Operating profit for the first quarter of this year is expected to significantly decrease to 450.1 billion KRW. Annual performance for this year is forecasted to show sales down 56.1% from the previous year to 8.1586 trillion KRW, and operating profit down 98.4% to 162.9 billion KRW. In particular, there is a possibility that operating profit will turn to a loss starting from the second quarter.

Yang Ji-hwan, a researcher at Daishin Securities, said, "The Korea Development Bank is rushing privatization through share sales, but for a successful share sale, clear guidelines on the handling of the 192nd to 197th convertible bonds and bonds with warrants are necessary," adding, "Without resolving the perpetual bonds, it will be difficult to find buyers."