[Click e-Stock] "HD Korea Shipbuilding & Offshore Engineering Expected to Reaffirm Holding Company Value Through Active Investment"

"Target Price Raised by 25%"

On June 5, Korea Investment & Securities maintained its "Buy" rating on HD Korea Shipbuilding & Offshore Engineering, stating, "An exemplary acquisition case like HD Hyundai Marine Engine will soon emerge. It is time for the holding company to reaffirm its value through active investment." The firm also raised its target price by 25%, from 320,000 won to 400,000 won.

On this day, Kang Kyungtae, a researcher at Korea Investment & Securities, stated, "We calculated the appropriate corporate value at 28.7 trillion won by adding the estimated net cash of 600 billion won at the end of 2028 to the sum of equity values, which is 22.3 trillion won."

For the subsidiary HD Hyundai Samho, the 2028 sales are estimated at 9.2585 trillion won, with an operating profit of 1.6933 trillion won (an operating margin of 18.3%). Kang explained, "This performance only considers the merchant ship division," and added, "Results related to port cranes in the industrial machinery division were not reflected, and opportunities for entry into the US market were also not assumed."

He continued, "To estimate merchant ship sales for 2028, it is necessary to set the merchant ship order backlog for 2029. For the most important LNG (liquefied natural gas) carriers, we assumed that all available delivery slots for 2028?2029 would be sold at 260 million dollars per vessel." "Because the quality of the order backlog secured so far overwhelmingly surpasses that of competitors, we expect to maintain a profitability advantage over competitors through 2028," he explained.

In particular, Kang emphasized, "A key variable and opportunity is to acquire additional companies that can create business synergies with subsidiaries." He cited the acquisition of HD Hyundai Marine Engine as a representative case, saying, "By acquiring HD Hyundai Marine Engine, the workload previously concentrated in the engine and machinery division of HD Hyundai Heavy Industries was partially distributed." "HD Hyundai Marine Engine increased its utilization rate by securing workloads, while Hyundai Heavy Industries focused on high-quality workloads and improved its product mix. The next investment target is expected to be an overseas shipyard, encompassing not only the United States but also the Philippines, India, and South America," he added.