Brokerage : Shinhan Securities
Analyst : Dongheon Lee, Jihan Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 130,000 (Lowered)
Core Momentum : Robust merchant earnings expansion driven by post-2024 high-price LNGC recognition and cost savings, with a diversified portfolio across merchant, offshore, and energy shielding against naval export uncertainties
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY Maintained, Target Price lowered from KRW 160,000 to KRW 130,000 (-18.8%) based on a 10% discount to the 2007 shipbuilding historical average P/E applied to 12FW EPS of KRW 6,955 (Current Price: KRW 88,800 as of July 27, 2026; Upside potential: 46.4%)
- 2Q26 Earnings Summary: Revenue reached KRW 5.44 trillion (+65% YoY) and Operating Profit came in at KRW 736.1 billion (+98% YoY, OPM 13.5%), beating market consensus by +33% in revenue and +38% in operating profit.
- Key Forecast Financials (2025 → 2026F → 2027F → 2028F):
- Revenue: KRW 12.78 trillion → KRW 16.40 trillion → KRW 17.14 trillion → KRW 18.69 trillion
- Operating Profit: KRW 1.17 trillion → KRW 2.27 trillion → KRW 2.69 trillion → KRW 3.15 trillion
- Net Profit (Controlling): KRW 1.25 trillion → KRW 2.09 trillion → KRW 2.17 trillion → KRW 2.57 trillion
- PER: 27.9x → 13.0x → 12.6x → 10.6x
- PBR: 5.6x → 2.9x → 2.3x → 1.9x
- ROE: 22.6% → 26.8% → 20.5% → 19.7%
- EV/EBITDA: 28.4x → 12.1x → 10.3x → 8.7x
🚀 2. [Market Opportunities & Business Outlook]
- Merchant Vessel Earnings & Profitability: In 2Q26, the merchant shipbuilding division recorded revenue of KRW 3.24 trillion (+15% YoY) and operating profit of KRW 735.6 billion (+95% YoY, OPM 22.7%). Profitability was driven by the concurrent benefits of high-price 2024–2025 LNGC revenue recognition, cost-saving outcomes, and favorable FX movements without one-off gains, with solid profit trends projected to continue into 2H26.
- Offshore (EPU) & Special Ship Units: The EPU (Energy Plant) division generated revenue of KRW 2.07 trillion (+350% YoY) and turned profitable with an operating profit of KRW 6.2 billion, supported by the delivery-based recognition of the P79 FPSO (~KRW 1.5 trillion) and change orders. The special ship division logged revenue of KRW 327.2 billion (+38% YoY) and turned to an operating loss of KRW 2.9 billion due to Canadian CPSP marketing expenses and domestic project fixed overhead.
- Portfolio Diversification & Medium-Term Outlook: While the timing and conversion of large-scale naval export contracts entail forecasting uncertainties following the Canadian bid outcome, follow-up defense drivers remain intact via KDDX, Dosan Ahn Changho-class (Changbogo-III), overseas submarines, and MRO services. Solid overall corporate growth is expected to be supported by a well-balanced portfolio spanning merchant vessels, offshore units, naval defense, and energy solutions.
📝 Editor’s Comment (Perspective)
The analyst views Hanwha Ocean as a resilient shipbuilder demonstrating outstanding fundamental earnings power through merchant LNGC margin expansion, capable of absorbing temporary naval order headwinds through its diversified business portfolio across merchant ships, offshore plants, and energy solutions. This perspective places higher emphasis on the structural step-up in merchant profitability and medium-to-long-term pipeline opportunities in domestic defense and MRO over short-term overseas bid results.
To evaluate whether this investment thesis continues to materialize, key verification points include whether merchant operating margins remain elevated in 2H alongside further order expansion, the commencement and order intake of new offshore projects in 2H, and tangible project conversions across KDDX, Changbogo-III, international submarine pipelines, and naval MRO contracts. These factors can be tracked via upcoming quarterly earnings reports, official IR disclosures, regulatory filings, and periodic financial reports.
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