[Click eStock] "HD Hyundai Mipo, Too Early to Talk About Peak Out... Target Price Up"

DS Investment & Securities evaluated on the 5th that it is still too early to discuss a peak out for HD Hyundai Mipo. They maintained a 'Buy' investment rating and raised the target price from the previous 115,000 KRW to 135,000 KRW.

In past cycles, HD Hyundai Mipo recorded losses in 2002 and turned around starting in 2003, reaching an operating profit peak between 2008 and 2010. Yang Hyung-mo, a researcher at DS Investment & Securities, stated, "In this cycle, HD Hyundai Mipo's performance turned around in the second quarter of this year. It is still far from discussing a peak out," adding, "Analyzing profits, order backlog, and potential order volume, this cycle is only in its early to mid stages."

The potential for future order growth is expected to be high. HD Hyundai Mipo secured $4.6 billion in orders cumulatively as of July. The order backlog amounts to $8.7 billion in sales terms, covering 178 vessels. However, the market size for possible orders considering only replacement demand includes 1,912 tankers and 2,815 container ships. Last year, all 163 shipyards in China, including large and small ones, delivered 937 vessels.

Accordingly, Researcher Yang predicted, "There is a very large number of small and medium-sized vessels available for ordering, but there is a shortage of shipyards," and added, "The tug-of-war with shipowners over high ship prices has already ended. Once ordering begins, the order volume will increase significantly."