HD Hyndai Marine Solution jumped more than 9% in early trading on the 27th. Buying appeared to concentrate after the company posted strong first-quarter results and analysts in the securities industry said additional upside momentum was sufficient.
As of 9:30 a.m. on the same day, HD Hyndai Marine Solution was trading at 283,000 won on the Korea Exchange, up 29,500 won (11.64%) from the previous session. It rose to as high as 286,000 won early in the session, hitting a 1-year high.
On the 24th, HD Hyndai Marine Solution said in a regulatory filing that it posted first-quarter revenue of 574.6 billion won and operating profit of 93.4 billion won. Revenue rose 18.3% and operating profit 12.5% from a year earlier. The company said growth in its aftermarket (AM) business focused on ship parts and services and increased revenue from the bunkering business drove results.
It also decided on a cash dividend. The company disclosed the same day that it decided on a quarterly cash dividend of 900 won per common share. The dividend yield was presented at 0.42%. The record date is on the 11th of next month, and the scheduled payment date is June 5. The total amount of dividends for this distribution is 40.35011 billion won.
Analysts in the securities industry said HD Hyndai Marine Solution has ample room for additional gains both quarterly and annually.
Yuanta Securities Korea raised its target price on HD Hyndai Marine Solution to 433,000 won from 270,000 won. It said risks have been resolved while factors remain that could lift earnings.
Kim Yong-min, an analyst at Yuanta Securities Korea, said, "The counterparty in April's block trade was confirmed to be global private equity fund manager KKR, and the remaining equity is estimated to have fallen to below 900,000 shares," and added, "We judge that the overhang risk has effectively been resolved."
Operating profit in the second quarter of this year is forecast to reach 117 billion won, surpassing 100 billion won for the first time on a quarterly basis.
Kim said, "We value the onshore power generation engine AM business for data centers at about 4.9 trillion won," and added, "Structural growth in engine AM, expansion of non-engine AM orders, recognition of onshore power generation revenue, increased deliveries of digital shaft generators, and growth in the eco-friendly segment will act in combination."