[Featured Stock] 'Strong Earnings and Expanding Ship Market' Hanwha Engine Up 3.47%

Hanwha Engine's stock price is gaining momentum due to steady performance and expected benefits from the expansion of the shipbuilding market. As of 9:14 AM on the 21st, Hanwha Engine was trading at 14,610 KRW, up 490 KRW (3.47%) from the previous trading day.

In the second quarter of this year, sales reached 286.5 billion KRW, a 52% increase compared to the same period last year, and operating profit surged 436% to 18.6 billion KRW. Both sales and operating profit exceeded market expectations by 4% and 36%, respectively, marking a surprise performance. Revenue recognition began from the backlog of orders that started to increase significantly from 2022, and low-priced orders until 2021 were depleted, leading to a trend of performance recovery starting from the first quarter.

On this day, Shinhan Investment Corp. maintained a "buy" rating on Hanwha Engine, stating that "long-term investment remains valid," and raised the target price by 54% from the previous level to 17,000 KRW.

Researcher Dongheon Lee of Shinhan Investment Corp. said, "This year, performance recovery is gaining momentum, showing a trend similar to the improvement in shipbuilders' results," adding, "The backlog ratio of Chinese shipbuilders is 28%, indicating a boom, and the increase in demand for eco-friendly parts is also positive." He also explained, "The benefits from the expansion of the ship market and the service market are also expanding centered on engines, and Hanwha Shipbuilding’s exclusive handling of engine services is a growth point."

The researcher further explained, "The target price applies a price-to-earnings ratio (PER) of 17.8 times to next year's earnings per share (EPS) of 940 KRW," adding, "This reflects upward revisions of net profit estimates due to performance improvements and considers the boom-period multiples of comparable companies amid favorable shipbuilding industry conditions."