[Click e-Stock] "Hanwha Engine, Profit Growth and Long-Term Growth Potential Confirmed"

On April 22, SK Securities maintained its "Buy" investment rating and target price of 32,000 won for Hanwha Engine, stating, "This year, the company is expected to achieve a record-high order volume and has secured both short-term and long-term growth potential."

On this day, Han Seunghan, a researcher at SK Securities, stated, "Hanwha Engine's first-quarter revenue reached 318.2 billion won, up 8.5% year-on-year, and operating profit was 22.3 billion won, an increase of 14.8%. Operating profit slightly exceeded the market consensus of 20.7 billion won."

In the first quarter, 30 engines were delivered, with about 2 to 3 units deferred to the second quarter, resulting in a decrease of 2 units compared to the 32 units delivered in the fourth quarter of last year. Revenue only declined by 2.5%. Han explained, "The proportion of high-margin project orders, including one methanol dual-fuel engine, increased, leading to a rise in average selling price (ASP). There was also a positive impact from the high exchange rate trend during the first quarter."

Notably, as of the first quarter, Hanwha Engine secured approximately 1.0587 trillion won in new orders this year, already achieving about 64% of last year's total annual order volume of 1.649 trillion won. Han estimated, "Considering the final delivery dates of this year's engine contracts, it is believed that more than 90% are destined for Chinese shipyards," and added, "This means that engine orders from Korean shipyards have not even started yet this year."

He stated, "There is a very high likelihood that Hanwha Engine will achieve a record-high order volume this year. Engine orders for North American LNG carriers, which will begin in earnest in the second half of the year, are expected to continue into next year. The company can maintain a high level of order performance and backlog."

He further added, "Following short-term growth driven by engine supply shortages in China, Hanwha Engine can continue its mid-term growth due to increased eco-friendly replacement demand in response to the International Maritime Organization (IMO)'s mid-term measures to reduce ship greenhouse gas emissions. Long-term growth is also expected as the aging fleet replacement cycle progresses."