Brokerage : Yuanta Securities
Analyst : Yongmin Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 179,000 (Maintained)
Core Momentum : Merchant earnings expansion driven by an increased revenue share of high-price FY24–25 orders, with medium-to-long-term valuation upside centered on the Canadian CPSP submarine tender outcome and 2H MASGA developments
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY Maintained, Target Price maintained at KRW 179,000 (Current Price: KRW 106,900 as of July 3, 2026; Upside potential: 67%)
- 2Q26 Earnings Outlook: Projected Revenue of KRW 3.63 trillion (+10.2% YoY, +13.1% QoQ), Operating Profit of KRW 586.0 billion (+57.6% YoY, +32.8% QoQ, OPM 16.1%), and Net Profit of KRW 656.0 billion (+341.7% YoY, +31.1% QoQ), beating market consensus (operating profit of KRW 497.0 billion).
- Key Forecast Financials (2025A → 2026F → 2027F):
- Revenue: KRW 12.78 trillion → KRW 13.97 trillion → KRW 15.61 trillion
- Operating Profit: KRW 1.17 trillion → KRW 2.18 trillion → KRW 2.47 trillion
- Net Profit (Controlling): KRW 1.25 trillion → KRW 2.79 trillion → KRW 3.24 trillion
- PER: 20.3x → 11.7x → 10.1x
- PBR: 4.1x → 3.6x → 2.7x
- ROE: 22.6% → 36.9% → 30.5%
- EV/EBITDA: 21.6x → 14.3x → 11.3x
🚀 2. [Market Opportunities & Business Outlook]
- Merchant Earnings Drivers: Results supported by a +7% QoQ increase in working days and favorable FX movements (estimated +KRW 78.0 billion in revenue, +KRW 27.0 billion in operating profit QoQ). Following the delivery of 9 units of FY22 orders in 1Q26, the revenue share of low-margin FY22 contracts dropped from 37% to 22%, while high-price FY24–25 vintages rose from 48% to 63%, offsetting the decline in the LNGC sales mix (71% → 62%).
- Canadian CPSP Submarine Valuation: Securing the CPSP project is estimated to yield an average annual operating profit of KRW 500.0 billion during FY32–43F, and over KRW 300.0 billion annually in MRO profits from FY44F onward. Applying a 20x P/E multiple derives a project equity value of approximately KRW 8.0 trillion. Since CPSP value is unreflected in current valuations, temporary share price pullbacks in the event of competitor selection are viewed as buying opportunities.
- Catalysts & Valuation Upside: While near-term share price volatility reflects CPSP tender uncertainty, fundamental downside remains well protected by sustained merchant earnings improvements and anticipated 2H MASGA-related defense developments even excluding CPSP.
📝 Editor’s Comment (Perspective)
The analyst views Hanwha Ocean as a defense and shipbuilding enterprise demonstrating robust commercial margin improvement through high-price order mix transition, while standing at a pivotal valuation inflection point governed by the Canadian CPSP submarine tender and upcoming US MASGA defense initiatives. This perspective focuses on the fundamental stability provided by commercial shipbuilding alongside the substantial long-term enterprise value potential tied to North American naval defense programs.
To evaluate whether this investment thesis continues to materialize, key verification points include confirmation of merchant OPM expansion in 2Q results driven by the growing share of FY24–25 high-price orders, the final contractor selection announcement for the Canadian CPSP submarine program, and concrete progress updates on US naval MRO/build partnerships under the MASGA framework in 2H. These factors can be tracked through upcoming quarterly earnings releases, official IR materials, regulatory filings, and periodic financial reports.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
