Korea Investment & Securities Co. said on the 13th that HD Hyundai Heavy Industries is expected to sustain earnings growth this year by expanding orders centered on special-purpose ships. It maintained its "Buy" investment rating and raised the target price to 730,000 won from 710,000 won. The previous trading day's closing price of HD Hyundai Heavy Industries was 604,000 won.
Kang Kyung-tae, an analyst at Korea Investment & Securities Co., said, "2026 will be a year to sufficiently fill the order book for special-purpose ships," and noted, "The order target is high, and the pipeline that can lead to actual contracts is also ample."
HD Hyundai Heavy Industries presented this year's special-purpose ship order target at more than $3 billion. This exceeds 20% of the 2026 total order target for the shipbuilding division of $14.5 billion and is about three times last year's special-purpose ship order performance.
Kang said, "Most of the order pipeline under review now is for export warships," explaining, "We are targeting two Philippine warships, one Thai frigate, two Estonian offshore patrol vessels (OPVs), and one Peruvian submarine." He added that icebreakers, which are also classified as special-purpose ships other than warships, are included among the order targets.
The earnings outlook is also positive. Korea Investment & Securities Co. estimates HD Hyundai Heavy Industries' consolidated sales for the fourth quarter of last year at 5.2644 trillion won and operating profit at 720.3 billion won. Those would be increases of 31.4% and 155.2%, respectively, from a year earlier.
Kang said, "Not only shipbuilding but all business divisions, including offshore, contributed to the improvement in fourth-quarter operating profit," and analyzed, "In the merchant ship division, the operating margin was 15.1% for large vessels and 11.3% for midsize vessels, with an overall 14.5%, continuing the quarterly growth trend."