[Click eStock] "Possible Sanctions on Chinese Shipbuilders... Domestic Shipbuilders Value-Up(?)"

There is a forecast that if the United States investigates and sanctions Chinese shipbuilding and shipping companies, the relative value of Korean shipbuilders will be highlighted.

According to NH Investment & Securities on the 15th, recently, major unions including the influential steel union in the United States submitted a petition to the government requesting national support for the U.S. shipbuilding industry. The petition's main point is that China is distorting the global market in the shipbuilding and shipping sectors through unfair and discriminatory actions, policies, and practices.

Additionally, it is reported that they requested support measures for the U.S. shipbuilding industry to promote domestic commercial shipbuilding and sanctions such as imposing port fees on Chinese-made vessels.

Following the news, Korean shipbuilding stocks showed a significant rise the previous day amid the possibility of a U.S. government investigation. Samsung Heavy Industries (+13%), Hanwha Ocean (+11%), HD Hyundai Heavy Industries (+8%), and Hyundai Mipo Dockyard (+4%) saw relatively large increases in their stock prices.

Jeong Yeonseung, an analyst at NH Investment & Securities, said, "At a time ahead of the presidential election, with the petition from the influential steel union submitted, it is highly likely that the U.S. government will respond to the investigation," adding, "It is expected that related issues will be repeatedly raised during the U.S. presidential election period."

Analyst Jeong also noted, "Last year, Chinese shipbuilders accounted for 50.9% of the global ship delivery volume, so it is difficult at this point to consider halting orders to Chinese shipyards," and added, "It will also be difficult for U.S. shipbuilders, which account for only 0.1% of global delivery volume, to significantly increase their construction volume in the short term."

He stated, "If the U.S. government imposes sanctions on Chinese shipbuilders, the cost competitiveness of Chinese shipbuilders will be undermined, which will lead to an increase in the relative slot value of Korean shipbuilders," but he also emphasized, "However, it is necessary to confirm whether the actual investigation will be carried out in the future and the results of the investigation."