IBK Securities projected on the 28th that if HD Hyundai Heavy Industries' Gunsan Shipyard becomes a maintenance, repair, and overhaul (MRO) base for the U.S. Navy, Sejin Heavy Industries will also benefit. IBK Securities maintained a 'buy' investment recommendation for Sejin Heavy Industries and a target price of 18,000 won.
O Ji-hoon, a researcher at IBK Securities, assessed that if discussions on transforming HD Hyundai Heavy Industries' Gunsan Shipyard into an MRO base, raised during recent Korea-U.S. tariff negotiations, materialize, Sejin Heavy Industries could also see reflected benefits. Currently, the Gunsan Shipyard is producing ship blocks, but becoming an MRO base could make it difficult for HD Hyundai Heavy Industries to continue using them for block manufacturing as it does now.
O noted, "For the Gunsan Shipyard to be reconfigured as a dedicated MRO base for U.S. Navy vessels, it must be designated as a defense contractor," adding, "Furthermore, there is a strong possibility it could be used as a base to respond to geopolitical risks such as maritime disputes in the South China Sea, which could make it harder to construct blocks at the Gunsan Shipyard."
From Sejin Heavy Industries' perspective, the likelihood of delivering tanks sufficient for 40 vessels by the targeted year of 2027 has increased. O emphasized, "If it becomes difficult to manufacture tanks at the Gunsan Shipyard, considering that HD Hyundai Mipo plans to produce 10 tanks for liquefied natural gas (LNG) bunkering vessels on its own, even with just the gas carriers contracted by HD Hyundai Heavy Industries and HD Hyundai Mipo, it is almost certain that Sejin Heavy Industries will achieve its target."
O particularly assessed that there is no longer any reason for Sejin Heavy Industries to face stock price adjustments. He remarked, "Sejin Heavy Industries is expected to record a favorable operating profit margin of 11.4% among equipment manufacturers," and added, "If the number of tank deliveries increases in the second half, profitability will improve, indicating that it is an opportune moment to actively increase the share of Sejin Heavy Industries."