Samsung Securities announced on May 8 that it has raised its target price for HD Hyundai Heavy Industries from 890,000 won to 1,030,000 won, citing improvements in profitability across all business divisions and the anticipated impact of high-value contracts. The investment rating remains at 'Buy.'
Analyst Han Young-soo noted, "First-quarter operating profit exceeded market expectations by 14%. Even without one-time gains, the results are impressive considering conservative performance bonuses and a high proportion of currency hedging."
He added that despite the merger with HD Hyundai Mipo, the shipbuilding sector has seen improved profitability, while the marine division has experienced significant revenue and profit growth due to the advancement of major projects. The engine division also continues to show improved operating margins.
Han emphasized that further profitability improvements are possible with the recognition of revenue from high-value contracts. As of the end of the first quarter, net cash approached 3.7 trillion won, and additional cash inflow is expected from the successful sale of the Gunsan yard.
He also highlighted the positive effects of increased orders for power engines for North American data centers and price hikes due to tight supply for ship engines, stating, "Considering premium factors, the current valuation is conservative, with ample room for further increases."
* This article has been translated by AI.
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