[Edaily Reporter PARK MIN ] On the 22nd, NH INVESTMENT & SECURITIES maintained its “Buy” rating and target price of 126,000 won for Hanwha Ocean(042660), stating that despite the aggressive expansion of commercial shipbuilding by Chinese shipbuilders, the company’s medium- to long-term order pipeline for liquefied natural gas (LNG) carriers and submarines remains valid. This represents an upside potential of 54.0% compared to the previous trading day’s (September 21) closing price of 81,800 won.

In a report published today, Jeong Yeon-seung, an analyst at NH INVESTMENT & SECURITIES, stated, “Although the pipeline for new orders of large specialty vessels within 2026 is limited, submarine procurement projects in Egypt, Greece, and the Middle East remain viable in the medium to long term,” adding, “Concrete order opportunities for U.S. warships and military support vessels are also expected to expand starting in 2027.”

According to the report, Hanwha Ocean’s cumulative order book as of the end of August stood at $5.94 billion. With the September order of six large container ships worth approximately $1.1 billion, the value of commercial ship orders is expected to exceed $5.5 billion. In the fourth quarter, the company anticipates securing the main contracts for the Venus FPSO (over $3 billion) and one Thai warship (680 billion won), as well as additional LNG carrier orders.

Hanwha Ocean is currently in negotiations for orders for LNG carriers scheduled for delivery in 2030. Although the company recently failed to secure a contract for a Canadian submarine project, it has been selected as the preferred bidder for one Thai destroyer and is awaiting the results of a bid for four Estonian patrol ships by the end of the year. Next year, concrete order opportunities are expected to emerge in U.S. naval projects, including next-generation transport ships developed in collaboration with Vard, maritime missile measurement vessels utilizing the Pili Shipyard, and U.S. Navy frigates.

In addition, orders for LNG carriers linked to U.S. LNG projects are expected to gain momentum next year, and the company is preparing to enter the market for floating data centers after securing design certification—both of which are cited as positive factors for Hanwha Ocean’s improved performance. In the long term, the company is also discussing submarine projects with countries in the Middle East, as well as Egypt, Greece, and Chile; therefore, even excluding Canada, the medium- to long-term order pipeline for specialty vessels remains robust.

Analyst Jeong Yeon-seung stated, “At a recent NDR (non-deal roadshow) for overseas institutional investors in Asia, investors’ primary concern was the potential weakening of Korean shipbuilders’ competitiveness in securing orders and their pricing power due to the aggressive expansion of Chinese shipyards.” He added, “Considering the intensifying competition with China for merchant ship orders in the medium to long term, order performance in the naval and offshore plant sectors—where the company does not compete directly with China—will be the most critical factor going forward.”

NH INVESTMENT & SECURITIES projected that Hanwha Ocean’s third-quarter consolidated revenue would reach 3.526 trillion won, a 16.6% increase year-over-year, while operating profit would rise 74.3% to 505.1 billion won. The firm analyzed that, despite a reduction in business days due to summer vacations and the Chuseok holiday, as well as a decline in the exchange rate, the expanded foreign exchange hedging positions established in the first half of the year would underpin the company’s earnings.

Analyst Jeong Yeon-seung said, “It is true that the potential for further increases in new merchant ship prices is limited due to aggressive capacity expansion by Chinese shipbuilders,” adding, “Ultimately, the key to earnings and valuation after 2027 lies in the visibility of orders for global specialty vessels (warships), including those from the U.S., and large offshore plants.”