[Click eStock] "Hyundai Mipo Dockyard, Early Cost Recognition... Expecting Profit Turnaround This Year"

[Asia Economy Reporter Myunghwan Lee] Hana Financial Investment stated on the 8th that although Hyundai Mipo Dockyard's loss widened in the fourth quarter of last year, this was due to one-time expenses such as provisions related to the ordinary wage lawsuit, and future performance is expected to improve. They maintained a buy investment opinion and a target price of 100,000 KRW.

Hyundai Mipo Dockyard's sales in the fourth quarter of last year were 860.5 billion KRW, a 30.6% improvement compared to the same period last year. This was thanks to increased shipbuilding volume due to higher operation rates and exchange rate increases. Its subsidiary, Hyundai Vietnam Shipbuilding, also showed sharp sales growth in the third quarter of last year due to the base effect from lockdown measures caused by the spread of COVID-19.

However, operating loss recorded 77 billion KRW, turning to a deficit compared to the previous quarter. Compared to the same period last year, the loss widened further. Researcher Jaeseon Yoo of Hana Financial Investment analyzed, "Although performance was somewhat sluggish due to provisions related to the ordinary wage lawsuit and preemptive cost reflection from wage system restructuring, operating profit is judged to be in the black." Hyundai Vietnam Shipbuilding achieved a turnaround to profitability due to increased sales.

Hana Financial Investment forecasted that Hyundai Mipo Dockyard's performance will improve as one-time issues such as the ordinary wage lawsuit are resolved. Researcher Yoo said, "While it is necessary to monitor future indicator trends, the possibility of additional costs occurring is not expected to be high in the short term," adding, "The year-end order backlog is stable at 5.25 billion USD (approximately 6.24 trillion KRW) based on sales, and profit margin improvement is possible due to continuous shipbuilding."

He further predicted, "As one-time issues are resolved, a full-scale performance turnaround is expected this year."

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