Brokerage : Daishin Securities
Analyst : Jini Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 139,000 (Lowered)
Core Momentum : Near-term earnings improvement supported by the early revenue recognition of an offshore FPSO project, with long-term fundamentals anchored by diversified global naval pipelines and US auxiliary ship synergies beyond the Canadian tender outcome
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY Maintained, Target Price lowered by 15.2% to KRW 139,000 based on a Target P/E of 19.8x applied to 2028F EPS of KRW 7,000, reflecting reduced multiples for European naval expectations (Current Price: KRW 82,000 as of July 8, 2026)
- 2Q26 Earnings Outlook: Projected Revenue of KRW 4.94 trillion (+49.8% YoY, +53.7% QoQ), Operating Profit of KRW 526.5 billion (+41.6% YoY, +19.3% QoQ, OPM 10.7%), and Net Profit of KRW 357.0 billion (+140.5% YoY, -28.6% QoQ), beating market consensus (revenue of KRW 3.48 trillion / operating profit of KRW 501.0 billion).
- Key Forecast Financials (2025A → 2026F → 2027F → 2028F):
- Revenue: KRW 12.78 trillion → KRW 15.19 trillion → KRW 16.20 trillion → KRW 16.99 trillion
- Operating Profit: KRW 1.17 trillion → KRW 2.12 trillion → KRW 2.87 trillion → KRW 2.83 trillion
- Net Profit (Controlling): KRW 1.25 trillion → KRW 1.55 trillion → KRW 2.08 trillion → KRW 2.15 trillion
- EPS: KRW 4,066 → KRW 5,066 → KRW 6,774 → KRW 7,000
- PER: 27.9x → 17.7x → 13.3x → 12.8x
- PBR: 5.6x → 3.6x → 2.8x → 2.3x
- ROE: 22.6% → 22.4% → 23.9% → 20.0%
🚀 2. [Market Opportunities & Business Outlook]
- Offshore Early Revenue & Margin Dynamics: Timing adjustments will bring ~KRW 1.5 trillion in revenue from an offshore FPSO project into 2Q26. Expanded from its original KRW 1.0 trillion contract value via Change Orders (C/O) and FX gains, cost-overrun provisions were already absorbed in prior quarters, allowing 2Q losses to narrow and C/O margin recognition to commence in 3Q.
- Diversified Special Ship Pipeline: While expectations for European naval orders have turned conservative post-CPSP, active pipelines remain in non-European markets such as Egypt, Colombia, the Philippines, and Saudi Arabia, indicating an excessive valuation discount.
- US Auxiliary Ship Synergies: Synergies with Philly Shipyard and Austal are expected to enhance bidding competitiveness for US naval auxiliary ships, limiting long-term fundamental impairment from the Canadian tender outcome.
📝 Editor’s Comment (Perspective)
The analyst views Hanwha Ocean as a company achieving near-term earnings gains through early offshore project recognition and upcoming C/O contributions, while considering recent share price declines as an excessive discount given its diversified naval pipeline and US shipyard synergies. This perspective incorporates a lowered valuation multiple for European defense prospects, while placing strategic emphasis on non-European defense tenders and cross-border auxiliary ship opportunities.
To evaluate whether this investment thesis continues to materialize, key verification points include the margin contribution of offshore C/Os in 3Q, the conversion of non-European defense pipelines (Egypt, Colombia, Philippines, Saudi Arabia) into definitive contract awards, and tangible progress in US naval auxiliary bids via Philly Shipyard and Austal. These factors can be tracked through upcoming quarterly earnings releases, official IR materials, regulatory filings, and periodic financial reports.
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