KB Securities analyzed on the 8th that HD Hyundai Heavy Industries achieved more than its target for new orders last year, but this was a decline compared to the previous year. Reflecting favorable market conditions, they raised the target stock price from 220,000 won to 340,000 won and recommended a 'buy' investment opinion. The closing price of HD Hyundai Heavy Industries on the previous trading day was 288,500 won.
Last year, new orders for HD Hyundai Heavy Industries totaled $10.85 billion, including $5.56 billion for commercial ships, $660 million for special vessels such as military ships and submarines, $1.42 billion for offshore plants, and $3.2 billion for engines and machinery. This exceeded the target of $9.53 billion by 13.9%. However, it was a 29.5% decrease compared to 2023 ($15.39 billion).
Dong-ik Jeong, a researcher at KB Securities, noted, "The backlog based on revenue is expected to have slightly decreased from $32.25 billion at the end of 2023 to $30.12 billion," but added, "There is still enough work equivalent to 2.6 years of the estimated revenue for this year."
This year, HD Hyundai Heavy Industries' guidance (expected outlook) is a revenue of 15.8 trillion won and new orders of $12.58 billion. Researcher Jeong evaluated this guidance as being aimed at increasing the order backlog through orders for special vessels and offshore plants, despite concerns over economic slowdown and the rise of protectionism, based on a backlog of over $30 billion and stabilized processes.
In the fourth quarter of last year, revenue is expected to have increased by 18.7% year-on-year to 4.05 trillion won, while operating profit is forecasted to have increased by 97.9% to 274.4 billion won, exceeding market expectations. Researcher Jeong explained, "The rise in new ship prices due to improved product mix, the downward stabilization of raw material prices, easing labor shortages, and the rise in exchange rates positively influenced the fourth-quarter results."
He then stated, "By reflecting changes in return on equity (ROE) due to favorable market conditions, we adjusted the target stock price upward, securing a potential increase of 17.9%."