[Click eStock] "SK Ocean Plant, Anticipation for Domestic Offshore Wind Market Growth in Second Half"

On the 16th, Samsung Securities maintained a target price of 20,500 KRW and a buy rating for SK Ocean Plant, stating that "the domestic offshore wind power market, which is expected to fully bloom from the second half of the year, and offshore wind power orders in Taiwan are anticipated."

SK Ocean Plant's consolidated sales and operating profit for the second quarter were 173.4 billion KRW and 15 billion KRW, respectively. While sales fell short of consensus, operating profit met expectations.

Although sales were sluggish due to the postponement of offshore wind power substructure orders, operating profit margin improved as highly profitable change orders and upscoping volumes were reflected in the results. Net profit for the period recorded 3 billion KRW due to one-time factors such as derivative product valuation losses. New orders in the second quarter totaled 465.7 billion KRW, including Taiwan Feng Miao (373.3 billion KRW) and Taiwan Hailong upscoping (67.8 billion KRW).

Meanwhile, the company revised down its 2024 sales guidance of 964.3 billion KRW by approximately 10-15%. With cumulative sales of 300.4 billion KRW in the first half, sales of over 500 billion KRW must be recorded in the second half to meet the lowered guidance. Of the 524 billion KRW offshore wind power order backlog as of the second quarter, projects worth about 120 billion KRW are expected to be reflected as sales within this year. Considering the Hailong upscoping volume expected to be ordered in the third quarter, second-half offshore wind power sales are projected to be just under 200 billion KRW. The company expects most of the remaining 300 billion KRW to be composed of special ship sales. In the second half, it is anticipated that the 3,000-ton coast guard ship will be launched and sales recognition for the Ulsan-class Batch 3 ship will begin in earnest.

Researcher Heo Jae-jun of Samsung Securities said, "In the second half, orders for domestic offshore wind power projects such as Anmado and Wando Geumil, as well as the Taiwan WLHC offshore wind power project, are expected." He added, "Orders for OSS foundation are also underway. With cumulative orders of 510.8 billion KRW in the first half and considering the Hailong upscoping volume expected in the third quarter, achieving 1 trillion KRW in orders for 2024 should be easily attainable."