[Edaily Reporter Kim Kyung-eun ] On the 28th, NH INVESTMENT & SECURITIES lowered its target price for Hanwha Ocean(042660)by 28%, from 126,000 won to 91,000 won, reflecting a downward revision in the exchange rate outlook, stagnant new shipbuilding prices, and slowing growth in the specialty vessel business. However, the firm maintained its “Buy” rating, noting that opportunities for new orders in the offshore plant and specialty vessel sectors remain valid.

Jeong Yeon-seung, an analyst at NH INVESTMENT & SECURITIES, stated in a report released today, “The current stock price corresponds to a 2027 forward price-to-earnings ratio (PER) of 11.4x, a level at which the growth premium has largely dissipated,” adding, “If order wins are confirmed, particularly in the offshore plants and specialty vessels segments, momentum for a stock price rebound will be established.”

Hanwha Ocean’s stock price closed at 53,000 won on the 27th. This represents a decline of approximately 65% compared to the 52-week high of 149,900 won recorded in January of this year. The stock price has also fallen by 40.3% over the past three months.

The main factors behind the stock price decline include limited growth in new ship prices due to aggressive capacity expansion by Chinese shipbuilders, delays in new orders caused by a short-term oversupply of LNG carriers, and weakening growth expectations for the specialty vessel business.

Reflecting these changes in market conditions, NH INVESTMENT & SECURITIES lowered its operating profit estimates for Hanwha Ocean for 2027 and 2028 by 18% and 19%, respectively. It also lowered its target price-to-book ratio (PBR) by 10% to account for rising market interest rates.

Hanwha Ocean’s third-quarter revenue this year reached 3.414 trillion won, a 12.9% increase year-over-year. Operating profit rose 67.6% to 485.7 billion won but fell short of market expectations by about 10%.

The merchant ship division recorded revenue of 2.72 trillion won and operating profit of 471.8 billion won. The operating profit margin stood at 17.4%, maintaining a solid level despite the strong won and a decrease in operating days. In contrast, the special-purpose ship division posted an operating loss of 70.6 billion won, reflecting increased projected costs for domestic warship construction projects.

Analyst Jeong stated, “In 2027, the revenue share from high-priced vessels ordered in 2024–2025 is expected to increase further,” adding, “Since upward pressure on plate prices and outsourcing costs is limited, the merchant ship segment’s annual operating profit margin should remain above 14%.”

He identified new order wins as the key factor for a future stock price rebound. He suggested that orders for LNG carriers scheduled for delivery in 2030 are likely to expand next year. In the offshore plant segment, analysts note that the likelihood of securing the contract for the “Venus” Floating Production, Storage, and Offloading (FPSO) project in Namibia has increased.

Researcher Jeong stated, “It is reported that SBM Offshore, the world’s leading FPSO company, has assessed the likelihood of winning the Venus project as low and has shifted some of its resources to other projects,” adding, “Consequently, we believe Hanwha Ocean’s chances of securing the contract have increased compared to before.” He further analyzed, “Securing the Venus project contract could serve as an opportunity to secure a favorable position in the competition for marine facilities for the Mopane project in Namibia, which the client, TotalEnergies, is additionally pursuing.”

He assessed, “Discussions are currently underway regarding merchant ship orders based on delivery volumes for 2029–2030,” and noted, “Even with Chinese shipyards expanding their production capacity, the likelihood of a sharp decline in ship prices remains limited.”