[Click eStock] "HD Hyundai Marine Solution Estimated to Meet Market Expectations in Q4"

On January 20, SK Securities analyzed that HD Hyundai Marine Solution likely achieved results in the fourth quarter of last year that were in line with market expectations. However, the company expects that last year’s estimated annual revenue of 2.06 trillion won was not reached due to a decrease in topline revenue from the bunkering business segment, which was affected by falling oil prices. Accordingly, SK Securities lowered its target price from 290,000 won to 270,000 won.

It is estimated that the company recorded 500.1 billion won in revenue and 92.7 billion won in operating profit in the fourth quarter. This represents increases of 7.9% and 40.7%, respectively, compared to the same period last year.

Han Seunghan, a researcher at SK Securities, stated, “The market consensus for operating profit in the fourth quarter was 94.1 billion won,” and explained, “Among the core business segments, AM Solution likely recorded revenue at a similar level to the previous quarter, as approximately 10 billion won worth of land-based power generation projects were deferred to the first quarter of this year.”

He added, “With the scheduled opening of a logistics warehouse in Singapore this April, this is expected to become a new growth driver for the revenue and profit of AM Solution going forward.”

He further noted, “As of the fourth quarter of last year, the proportion of LTSA in engine AM revenue expanded from about 10% to the high teens. Through the gradual increase in LTSA proportion, the company is expected to achieve qualitative growth by reducing costs and raising sales prices in line with inflation.”

Han also analyzed, “The Eco-Friendly Solution segment appears to be maintaining solid growth compared to the previous quarter. This year, with the expansion of EPLO volume and the full-scale revenue recognition from the retrofit project for one FSU vessel ordered last year, starting in the second half, the segment is expected to continue its robust growth.”

Additionally, he explained, “For the Digital Solution segment, revenue from shaft generators began to be fully reflected from the previous quarter. With orders for 11 vessels, the company now has a total order backlog of 50 vessels.”