Brokerage : Yuanta Securities
Analyst : Yongmin Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 179,000 (Maintained)
Core Momentum : Differentiated earnings growth driven by expanding revenue recognition of high-price FY24–25 orders and recurring FX gains under a limited hedging policy during periods of Won weakness
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY Maintained based on SOTP valuation, Target Price maintained at KRW 179,000 (Current Price: KRW 88,800 as of July 27, 2026; Upside potential: 102%)
- 2Q26 Earnings Summary: Revenue came in at KRW 5.44 trillion (+65.2% YoY, +69.6% QoQ), Operating Profit stood at KRW 736.0 billion (+98.0% YoY, +66.9% QoQ, OPM 13.5%), and Net Profit attributable to controlling interests reached KRW 810.0 billion (+445.7% YoY, +62.0% QoQ), significantly beating consensus (operating profit of KRW 534.0 billion) and the brokerage’s prior estimate (KRW 586.0 billion).
- Key Forecast Financials (2025A → 2026F → 2027F):
- Revenue: KRW 12.78 trillion → KRW 15.96 trillion → KRW 16.05 trillion
- Operating Profit: KRW 1.17 trillion → KRW 2.68 trillion → KRW 3.26 trillion
- Net Profit (Controlling): KRW 1.25 trillion → KRW 3.41 trillion → KRW 3.15 trillion
- PER: 20.3x → 8.0x → 8.7x
- PBR: 4.1x → 2.8x → 2.1x
- ROE: 22.6% → 43.3% → 28.1%
- EV/EBITDA: 21.6x → 9.7x → 7.0x
🚀 2. [Market Opportunities & Business Outlook]
- Merchant Division Drives Earnings Surge: In 2Q26, the merchant shipbuilding division posted an operating profit of KRW 735.6 billion (OPM 22.7%). Excluding ~KRW 1.5 trillion in one-off offshore project delivery revenue (which had limited profit impact), merchant operations drove the overall surprise. Key differentiation factors versus peers include: 1) higher sales mix of high-price orders secured in FY24–25, and 2) full realization of FX translation gains stemming from KRW depreciation under a limited hedging policy.
- Recurring Mechanism of FX Gains: Following 1Q26, substantial FX translation gains contributed to 2Q26 profits. As order-intake exchange rates were below KRW 1,400, this spread represents one-off gains that can recur as long as the Korean Won remains weak, reinforcing organic profitability improvements.
- Downside Support Factors: Solid profitability driven by expanding revenue recognition of FY24–25 order vintages, alongside recurring FX gains (barring a sharp drop in USD/KRW toward KRW 1,400), will provide robust fundamental downside support for the stock in 2H26 in addition to US-Korea shipbuilding cooperation themes.
📝 Editor’s Comment (Perspective)
The analyst views Hanwha Ocean as a shipbuilder demonstrating differentiated earnings performance versus peers, driven by the combination of high-price order mix recognition and recurring FX translation gains under a limited hedging policy in a weak-Won environment. This perspective emphasizes the compounded effect of organic profitability gains from high-value contracts and the continued benefit of currency translation as long as foreign exchange conditions remain favorable.
To evaluate whether this investment thesis continues to materialize, key verification points include whether merchant vessel operating margins remain near the 20% level as FY24–25 orders expand in the revenue mix, the persistence of FX-driven profit contributions across upcoming quarterly results, and tangible contract progress in US-Korea naval collaboration projects. These factors can be monitored through future quarterly earnings releases, official IR materials, regulatory filings, and periodic financial reports.
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