[Click eStock] LNG Shipowners in Urgent Situation... Samsung Heavy Industries' Order Outlook 'Clear'

Qatar, Mozambique, and Others Compete for LNG Orders... Positive Signal for Performance Improvement

[Asia Economy Reporter Minwoo Lee] There is an analysis that the order outlook for LNG carriers, Samsung Heavy Industries' main ship type, is favorable. Since shipowners are in a rather urgent situation, it is expected that additional orders in the future will improve cash flow and the stock price will also show an upward trend.

On the 11th, Hana Financial Investment changed its investment opinion on Samsung Heavy Industries from 'Neutral' to 'Buy' and raised the target price by 100% from 5,000 won to 10,000 won. The closing price the previous day was 6,870 won. Since the volume of LNG carrier orders, Samsung Heavy Industries' main ship type, is expected to increase significantly in Qatar and Mozambique, the possibility of cash flow improvement is high, and a rise in stock price is anticipated.

According to the industry, following Qatar, it has been reported that 8 LNG carrier construction slots were reserved each for Samsung Heavy Industries and Hyundai Heavy Industries in Mozambique. Ahead of LNG carrier orders, shipowners seem to be rushing to reserve construction slots at Korean shipyards.

Park Muhyun, a researcher at Hana Financial Investment, analyzed, "As technology has become more complex due to changes in propulsion engines, technical meetings between shipyards and shipowners have become longer than in the past, so before competing shipowners sign the main construction contracts, they want to reserve the construction docks of Korean shipyards first." He added, "By securing LNG carrier construction docks amounting to 140 vessels in Qatar, the ordering movements of competing shipowners for other projects including Mozambique have become even more urgent."

The overall industry order outlook is also bright. Domestic shipyards have an order backlog of 120 vessels until the first half of 2022. Considering only the three projects of about 140 Qatar LNG carriers, 16 Mozambique LNG carriers, and Yamal LNG, they have secured an average annual delivery volume close to 30 vessels until 2027.

Researcher Park said, "Considering that the annual LNG carrier delivery volume of domestic shipyards is about 40 vessels, about half of the ship sales target for the next five years has been resolved." He predicted, "This will accelerate ordering movements of shipowners of other ship types such as tankers and container ships, and the order prices will naturally show an upward trend."

This content was produced with the assistance of AI translation services.