IBK Investment & Securities reported that HD Hyundai Heavy Industries has already exceeded its annual order target for the year in the commercial ship and engine sectors, but still has room for additional orders. The firm set a target price of 840,000 won and maintained a 'buy' rating.
In a report released on the same day, analyst Jang Seong-ho stated, "With existing orders in place, visibility for performance growth has increased through 2028, and demand for liquefied petroleum gas (LPG) carriers and high-speed engines is beginning to translate into new orders."
Jang noted, "Currently, U.S. LPG is being rerouted to Asia via Cape Hope due to disruptions in the energy supply chain caused by the closure of the Strait of Hormuz. This has led to a surge in freight rates and a strong demand for very large gas carriers (VLGCs)."
He added, "Even if supply chain disruptions are resolved, we expect this cycle to be prolonged. The import of U.S. LPG by Asian countries such as India and China is increasing, and the congestion at the new locks of the Panama Canal is structurally rising, which will likely increase the frequency of VLGCs passing through Cape Hope."
Regarding high-speed engines, demand is expected to grow, particularly from U.S. data centers. Jang explained, "The demand for high-speed engines from U.S. data centers is projected to expand in the future, as power supply is considered one of the biggest bottlenecks in data center expansion, and high-speed engines are already a proven power source."
He further stated, "U.S. energy infrastructure companies have already chosen high-speed engines for data center power supply, and once a power source is adopted, demand is expected to continue to rise."
* This article has been translated by AI.
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