[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 30th that it is maintaining its “Buy” rating on HD HYUNDAI HEAVY INDUSTRIES(329180)but lowering its target price from 830,000 won to 700,000 won.

Jeong Yeon-seung, an analyst at NH INVESTMENT & SECURITIES, explained, “This target price adjustment reflects an increase in the cost of capital from 6.9% to 7.9%, taking into account heightened stock price volatility and rising interest rates.” He added, “Changes to medium- to long-term earnings estimates, including those for 2026, are limited, and improved profitability in the merchant ship and engine segments is expected to drive company-wide earnings growth.”
He explained, “Annual orders for merchant ships have already exceeded the target. The key to orders in 2026 lies in high-margin gas carriers such as LNG and LPG ships, and the company has particularly recorded order results that differentiate it from competitors in the LPG ship segment.” He continued, “Although there is uncertainty regarding the scale of expansion for data center engines, the direction of expansion is clear. As the most profitable product, it is expected to lead earnings improvement starting in 2028.”
He continued, “The floating data center business is taking shape, and a small modular reactor (SMR) pilot project is also scheduled. There are opportunities to secure orders for naval vessel projects in the Philippines and Peru in the fourth quarter,” he noted. “We assess that, among major domestic shipbuilders, the company has the strongest order momentum in sectors other than merchant ships. With the P/E ratio projected to fall to 11.5 times by 2028, investors should view the recent stock price correction as a buying opportunity,” he advised.
Second-quarter revenue was 6.3322 trillion won (up 53% year-over-year), and operating profit was 1.04 trillion won (up 121%), in line with market consensus. Analyst Jeong added, “An increase in operating days, favorable exchange rates, productivity improvements, and rising shipbuilding prices drove profitability improvements in the merchant ship segment,” noting, “Since orders secured prior to 2023 account for approximately 60% of total revenue, there is ample room for further profitability improvements as the revenue share from high-priced orders expands in the future.”