NH Investment & Securities said on the 15th that Korean shipbuilders are expected to record an increase in orders this year that surpasses last year's performance, helped by the resumption of gas carrier orders. It cited cooperation with foreign shipbuilders, a rise in liquefied natural gas (LNG) carrier prices, and overseas naval ship orders as the keys for share prices going forward.
Jeong Yeonseung of NH Investment & Securities said, "The order target for this year presented by HD Korea Shipbuilding & Offshore Engineering came in above market expectations," and analyzed that it "suggests that the order cycle for the Korean shipbuilding industry has not yet reached its peak." Earlier, HD Korea Shipbuilding & Offshore Engineering set a combined order target for this year at $26.8 billion, up 17.5% from last year's actual orders of $22.8 billion.
Jeong summarized the significance of the higher order target in two main points. First, with global commercial ship orders this year projected at about 90 million tons, above the past 10-year average, Korean shipbuilders—with large exposure to higher-priced gas carriers—could see order values rise further this year compared with last year.
Next, he pointed to the raised order target for special-purpose ships (such as warships). Even though some projects, including Canadian submarines and KDDX, remain uncertain and are not reflected in the target, the target was raised in consideration of expanding opportunities for global naval exports and the potential opening of new special-purpose ship markets such as icebreakers, he said.
Additional drivers expected to propel share prices include higher LNG carrier prices, overseas shipyard expansion and concrete cooperation with key partners, and securing overseas naval ship export projects. Considering the resumption of the Mozambique LNG project and final investment decisions (FID) on three new LNG projects in the first quarter, the company judges that gradual price increases are possible in line with rising LNG carrier demand.
Jeong added, "The direction of cooperation between HD Hyundai Heavy Industries and U.S.-based Huntington Ingalls will be an important milestone," and said, "HD Korea Shipbuilding & Offshore Engineering is preparing to expand orders for midsize ships by expanding the production capacity of shipyards in the Philippines and Vietnam, and if the building capabilities of those shipyards are proven, the order value in 2027 could be higher than in 2026."