[Edaily Reporter Kim Kyung-eun ] On the 15th, KIWOOM Securities expressed regret over Hanwha Ocean(042660)’s failure to secure the Canadian Submarine Program (CPSP) contract and lowered its target price from 179,000 won to 144,000 won. However, it maintained its “Buy (BUY)” investment rating, noting that expectations for mid- to long-term growth driven by the expansion of the U.S. warship business remain valid.

Lee Han-gyeol, an analyst at KIWOOM Securities, stated in a report released that day, “We have adjusted the target price-to-earnings ratio (PER) from 25x to 23x by reducing the premium from 25% to 15% on the upper end of the valuation range observed during past boom periods for shipbuilders.”

Hanwha Ocean’s second-quarter consolidated revenue is projected at 4.805 trillion won, with operating profit at 547.4 billion won. These figures represent year-over-year increases of 45.9% and 47.3%, respectively, and operating profit is expected to exceed market consensus. The operating profit margin (OPM) is estimated at 11.4%.

Lee Han-gyeol, an analyst at KIWOOM Securities, explained, “The merchant ship division is expected to post strong results as the proportion of high-value vessels expands, productivity improves, and favorable exchange rate effects continue,” adding, “In the energy plant division, the burden of fixed costs is expected to ease as approximately 1.5 trillion won in revenue from the P79 project is recognized ahead of schedule.” However, he analyzed that “the specialty ship segment will continue to post operating losses due to the burden of fixed costs resulting from proactive capital expenditures, despite revenue growth.”

The analyst predicted that order momentum would strengthen again in the second half of the year. As of the end of June this year, Hanwha Ocean had secured orders for a total of 21 merchant vessels—including 6 LNG carriers, 12 Very Large Crude Carriers (VLCCs), and 3 Very Large Ammonia Carriers (VLACs)—worth approximately $3.4 billion. Considering that last year’s total new orders amounted to about $9.5 billion, the company needs to secure additional orders in the second half of the year.

KIWOOM Securities forecast that new orders will gradually increase in the second half of the year, driven by expanded LNG carrier orders from the U.S. and increased tanker orders resulting from the restructuring of global energy supply chains. In the offshore sector, the firm also expects successful bids for the “Venus” FPSO project in Namibia and projects in South America.

In the specialty vessel sector, although the company failed to secure the Canadian Submarine Program (CPSP)—which was a key project this year—medium- to long-term growth prospects remain strong due to ongoing projects such as Thai frigates, Estonian offshore patrol vessels (OPVs), and South Korea’s Next-Generation Destroyer (KDDX) program. In particular, the firm viewed the potential expansion of U.S. naval vessel projects as a long-term growth driver.

The analyst stated, “It is time to focus on the potential expansion of the U.S. naval shipbuilding market, which will drive medium- to long-term growth momentum in the special-purpose vessel sector alongside the steady growth of the merchant ship sector,” while adding, “It will take time to reach a consensus during the process of rebuilding the U.S. shipbuilding industry.”