[Click eStock] "Hyundai Mipo Dockyard Expected to Return to Profit... Target Price Up 20%"

[Asia Economy Reporter Myunghwan Lee] Hana Securities announced on the 1st that it maintains a buy rating on Hyundai Mipo Dockyard and raises the target price by 20% from the previous 100,000 KRW to 120,000 KRW. This is due to the company's second-quarter performance meeting expectations and the anticipated improvement in operating results in the second half of the year.

Hyundai Mipo Dockyard's sales in the second quarter of this year recorded 935.4 billion KRW, a 29.4% increase compared to the same period last year. This was attributed to an increase in construction volume and a higher proportion of small LPG carriers and high-spec feeder container ships. Operating loss was 6.6 billion KRW, narrowing the deficit compared to the previous quarter. Despite the increase in sales, losses continued due to steel price hikes, but the effect of exchange rate appreciation offset this, according to Hana Securities' analysis. However, pre-tax profit turned positive, mainly due to increased foreign currency-related gains from exchange rate changes.

Hana Securities evaluated that Hyundai Mipo Dockyard's second-quarter performance met market expectations. Despite provisions related to rising steel prices, the exchange rate appreciation effect offset negative factors, Hana Securities analyzed. As of the second quarter, new orders amounted to 2.24 billion USD, achieving 62.1% of the 2022 annual target of 3.6 billion USD. The order backlog stood at 7.65 billion USD, indicating more than two years of workload.

The impact of Russia-related cost issues on Hyundai Mipo Dockyard's performance is expected to be limited. Hana Securities also forecasted that the company will record a turnaround in operating results in the second half of this year.

Researcher Jaeseon Yoo of Hana Securities stated, "With the expansion of geopolitical risks, there has been an overall increase in ton-mile in the market, and as freight rates remain strong, order demand is being stimulated," adding, "Since July, multiple PC tanker order contracts have been confirmed, and considering the current market conditions, expectations for new orders are also positive."

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