Heungkuk Securities lowered the target price for Daehan Shipping from 3,500 KRW to 2,800 KRW on the 22nd.
Daehan Shipping recorded sales of 354.7 billion KRW and an operating profit of 59.9 billion KRW in the first quarter. Compared to the same period last year, sales increased by 1.4%, but operating profit decreased by 18.6%. Profitability declined year-on-year due to the deterioration of the bulk carrier market.
Looking specifically at the bulk carrier segment, sales dropped 19.6% to 151.6 billion KRW, and operating profit fell 56.4% to 22.6 billion KRW. While Daehan Shipping's standalone performance was not bad, the sharp decline in the performance of subsidiaries such as Daehan Shipping Co., which focuses on bulk carriers, and Changmyeong Shipping caused the overall drop. In particular, Changmyeong Shipping recorded an operating loss of 1.8 billion KRW in the first quarter, turning to a deficit.
However, Heungkuk Securities expects bulk carrier operating profit to improve in the second half of the year, starting from the first quarter low.
Researcher Lee Byung-geun of Heungkuk Securities said, "We are lowering the target price as we revise down this year's earnings estimates," but added, "Daehan Shipping's stock price is undervalued at a PBR of 0.4 times based on this year, and with a rebound in the Baltic Dry Index (BDI) and performance improvements centered on subsidiaries, the stock price is expected to rebound along with the BDI."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
