[Market Focus] Sejin Heavy Industries Hits Record High on Expectations of Indirect Gains from Gunsan Shipyard's MRO Conversion

Sejin Heavy Industries showed strong performance in early trading.

As of 9:07 a.m. on July 28, Sejin Heavy Industries was trading at 12,950 won, up 8.28% (990 won) from the previous trading day. At one point during the session, the price surged to 13,260 won, setting a new 52-week high.

The boost in investor sentiment is due to expectations for improved order intake in the second half of the year. This comes as analysts in the securities industry suggest that Sejin Heavy Industries could benefit if HD Hyundai Heavy Industries' Gunsan Shipyard becomes a maintenance, repair, and overhaul (MRO) base for U.S. Navy vessels.

Jihoon Oh, a researcher at IBK Investment & Securities, stated, "If the discussions to transform HD Hyundai Heavy Industries' Gunsan Shipyard into an MRO base, which were raised during recent Korea-U.S. tariff negotiations, materialize, Sejin Heavy Industries could see indirect benefits." He further explained, "Even considering that tank production at Gunsan Shipyard will become difficult and that HD Hyundai Mipo is producing tanks for 10 liquefied natural gas (LNG) bunkering vessels (fuel supply ships) on its own, Sejin Heavy Industries is almost certain to achieve its targets with just the gas carriers ordered by HD Hyundai Heavy Industries and HD Hyundai Mipo."

Sejin Heavy Industries aims to deliver tanks for 40 ships by 2027. If Gunsan Shipyard is reorganized as a dedicated MRO base for U.S. Navy vessels, it will become difficult for HD Hyundai Heavy Industries to manufacture tanks at Gunsan Shipyard, which means Sejin Heavy Industries could enjoy indirect benefits, according to analysts.