Hanwha Ocean stock price outlook is mixed… “Expansion of special ships” vs. “Long-term sluggish order intake”

Securities companies’ stock price outlook for Hanwha Ocean is mixed. NH Investment & Securities raised its target stock price to 41,000 won, focusing on the growth potential of the special ship business and Hanwha Investment & Securities focusing on land plants and wind power businesses. On the other hand, Hi Investment & Securities lowered its target stock price to 32,000 won due to concerns about a long-term slump in orders. Hanwha Ocean’s stock price is 34,450 won as of the 24th.

On the 25th, Jeong Yeon-seung, a researcher at NH Investment & Securities, said, “Although the benefits from the US sanctions against Chinese shipyards are judged to be limited, the expansion of the special ship-related business has high visibility.” Accordingly, it is possible to level up the growth of the special appearance.”

Hanwha Ocean exceeded the market consensus in terms of profitability, with sales in the first quarter of this year reaching KRW 2.28 trillion, a 58.6% increase compared to the same period last year, and operating profit turning into a surplus at KRW 52.9 billion. NH Investment & Securities predicted that although the proportion of low-price container sales was high until the second quarter, profitability improvement would begin in earnest in the second half due to an increase in the proportion of liquefied natural gas (LNG) ship sales and increased construction volume. The target stock price was raised from 33,000 won to 41,000 won.

On this day, Kang Kyeong-tae, a researcher at Korea Investment & Securities, also said, “It is time to reflect new revenue sources such as onshore plants and wind power businesses, which are scheduled to be physically divided from Hanwha Holdings’ construction division as of July 1 of this year, in the performance estimates,” adding, “Based on the time of acquisition, there are two factors in Hanwha Ocean’s second-half performance.” “Considering that business performance is reflected, we newly reflected sales of KRW 615.7 billion and operating profit of KRW 48 billion.”

Korea Investment & Securities also paid attention to the possibility of an increase in special ship performance depending on the results of U.S. Navy ship maintenance and repair (MRO) orders in the first half of the year and whether the transaction of the company pursuing the acquisition is concluded. The target stock price was raised significantly from 29,000 won to 41,000 won.

On the other hand, Byun Yong-jin, a researcher at Hi Investment & Securities, said, “I am concerned about future sales uncertainty due to the long-term slump in orders. Last year’s orders amounted to only $3.3 billion, which is the level of overall sales, and this year’s accumulated orders amounted to $3.3 billion, including 12 Qatar LNGCs. “Because it is at a low level compared to other competitors, I am worried about sales in 2025-2026.” According to Clarkson, Hanwha Ocean’s delivery schedule will decrease to 39 ships in 2024, 30 ships in 2025, and 25 ships in 2026.

It was assessed that the marine and special ship businesses, which take a long time from contract to delivery, will not be of great help to short-term sales, and if orders such as tankers do not continue, the increase in sales this year will be only a brief increase. Uncertainties in the wind power and plant business from Hanwha Group were also mentioned. Researcher Byeon said, “There is no clear answer as to what kind of synergy a business that is largely unrelated to the main business can create with existing sectors,” and added, “I am not happy that the number of business sectors is increasing before the performance of the merchant and special ship business is visualized.” . Hi Investment & Securities changed its investment opinion on Hanwha Ocean from buy to hold and lowered its target stock price from 37,000 won to 35,000 won.

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