[Click e-Stock] "HD Hyundai Mipo Expected to Improve Profitability on Rising Gas Carrier Orders... Target Price Up"

On June 26, NH Investment & Securities stated that it expects HD Hyundai Mipo to continue improving its profitability in the mid- to long-term, driven by increased demand for mid-sized gas carriers. The firm maintained its 'Buy' investment rating and raised its target price by 17% to 226,000 won.

Jung Yeonseung, a researcher at NH Investment & Securities, explained, "The LPG carriers and LNG bunkering vessels ordered this year have both higher unit prices and profitability compared to the mainstay MR tankers." He added, "With the increase in gas carrier orders, the unit price per vessel has risen, and the order backlog has also improved in quality." He further predicted, "Additional LNG bunkering vessel orders are expected in the second half of this year, with the possibility of securing 5 to 10 more vessels." Accordingly, the company raised its operating profit estimates for 2026 and 2027 by 10.7% and 19.5%, respectively.

The trend of increasing demand for gas carriers is also expected to continue. Jung emphasized, "For gas carriers, technological capability and safety are just as important as price competitiveness due to the characteristics of transporting such cargo." He noted, "Over the next three to five years, starting with liquefied carbon dioxide carriers (LCO2), demand for new mid-sized gas carriers could expand further." He also assessed that "the order cycle for mid-sized gas carriers could be longer than that of larger vessels."

HD Hyundai Mipo has already achieved $1.91 billion in orders, which is about half of its annual target of $3.8 billion. Although orders for its mainstay MR tankers have been sluggish, orders for mid-sized LPG carriers, LNG bunkering vessels, and small container ships have partially offset this shortfall.

Second-quarter results are expected to meet market expectations, with sales of 1.3 trillion won and operating profit of 80.1 billion won. These figures represent increases of 15.0% and 359.9%, respectively, compared to the same period last year. From the third quarter onward, profitability is expected to improve significantly. Jung predicted, "From the third quarter, sales of petrochemical product carriers, which have seen price increases, will be reflected, leading to a step-up in profitability."