SOL Shipbuilding Equipment ETF Newly Listed

Shinhan Asset Management will list the 'SOL Shipbuilding Equipment ETF,' which invests 100% exclusively in the shipbuilding equipment sector, on the Korea Exchange on December 16.

The shipbuilding industry has entered a structurally booming phase, driven by increased orders for LNG carriers, eco-friendly vessels, and ultra-large container ships. Typically, in the shipbuilding industry cycle, the share prices of shipbuilders rise first, followed by a lagged increase in the share prices of shipbuilding equipment companies.

During the previous shipbuilding supercycle from 2005 to 2007, equipment companies such as those producing engines, insulation materials, and fittings also experienced steep gains after the shipbuilders.

Kim Junghyun, Head of ETF Business at Shinhan Asset Management, explained, "Since last year, expectations for improved orders and earnings at the three major shipbuilders have already been reflected in their share prices. Starting this year, as actual ship construction ramps up, we expect equipment orders to translate into tangible results."

He added, "Key equipment such as engines, insulation materials, ship blocks, fittings, and valves tend to show earnings and share price improvements with a slight delay compared to shipbuilders, making next year the main period to watch."

The SOL Shipbuilding Equipment ETF builds its portfolio with companies representing the value chain of shipbuilding equipment. The main components include: ▲Ship engines (Hanwha Engine, HD Hyundai Marine Engine, STX Engine) ▲AM Solutions (HD Hyundai Marine Solution) ▲Insulation and thermal materials (Korea Carbon, Dongsung Finetec) ▲LNG/LPG tanks (Sejin Heavy Industries) ▲Ship blocks and port cranes (Hyundai Himsen) ▲Fittings, valves, and piping (Seongkwang Bend, Taekwang), among others.

Kim further introduced, "The SOL Shipbuilding Equipment ETF is the only ETF in Korea that focuses 100% on the shipbuilding equipment sector. Through key equipment companies, it offers an efficient way to capture the benefits of the second cycle in the shipbuilding industry."

With the listing of the SOL Shipbuilding Equipment ETF, Shinhan Asset Management has completed a lineup of shipbuilding ETFs that can respond to the shipbuilding industry cycle in stages, alongside 'SOL Shipbuilding TOP3 Plus,' the largest shipbuilding ETF in Korea. The lineup now includes three shipbuilding ETFs, including 'SOL Shipbuilding TOP3 Plus Leverage,' which targets investors seeking to aggressively track upward momentum during periods of increased short-term volatility in shipbuilding stocks.