[Click eStock] "HD Hyundai Marine Engine, Sales Double"

On the 10th, Daol Investment & Securities stated, "HD Hyundai Marine Engine's sales will grow by 136% by 2026," and issued a 'BUY' investment rating with a target price of 45,000 KRW.

Daol Investment & Securities analyzed that after the ship market boom that began in 2021, shipbuilding stocks have risen significantly, making ship engine companies more attractive. First, due to China's dominance in the container ship market, orders for Korean-made engines are expected to increase along with unit prices. Additionally, while domestic shipyards cannot expand docks to increase volume, the engine sector has the advantage of being able to increase volume through facility expansion.

In August 2023, HD Korea Shipbuilding & Offshore, which acquired the former STX Heavy Industries and renamed it HD Hyundai Marine Engine, is a major global manufacturer of low-speed engines for ships. Its annual production capacity is 2 million horsepower, but last year it produced only 810,000 horsepower. Based on consolidated financial statements, last year's sales were 308.1 billion KRW, with an operating profit of 31.8 billion KRW, resulting in an operating margin exceeding 10%.

Daol Investment & Securities expects that even if HD Hyundai Marine Engine only handles orders from affiliated companies, sales will increase significantly, and the acquisition of technical know-how from affiliates will shorten lead times.

Analyst Choi Kwang-sik stated, "If preparations are made in 2025 and HD Hyundai Mipo handles only 50% in 2026, sales will reach 860 billion KRW, a 136% increase compared to last year," adding, "Although the lead time is about 30% slower than HD Hyundai Heavy Industries Engine & Machinery Division, productivity can improve by transferring know-how and systems, enabling a volume increase of over 40%."