[Click e-Stock] "HMM to Buy Back 2.1 Trillion Won in Treasury Shares...Neutral Rating Maintained"

Lack of Momentum After Share Buyback
Share Price Decline Seen as Unavoidable

On August 18, Hana Securities maintained its Neutral investment rating and target price of 24,000 won for HMM, stating, "A decline in share price is inevitable due to the lack of momentum following the 2 trillion won share buyback."

On the same day, Ando Hyun, a researcher at Hana Securities, analyzed, "In the short term prior to the record date for the share buyback, the stock price is expected to fluctuate in the range of 23,000 to 25,000 won, which is lower than the buyback price of 26,200 won per share."

On August 14, HMM announced its decision to buy back and cancel its own shares. The company plans to purchase and cancel a total of 81.8 million shares, equivalent to 8% of its outstanding shares. The record date for the public tender offer of treasury shares has been set for September 12. This move is part of the corporate value enhancement plan announced in January. HMM previously announced a special shareholder return program for this year, totaling 2.5 trillion won, including dividends and share buybacks with cancellation.

Researcher Ando explained, "The public tender offer price is set at 26,200 won per share, which represents a 19% premium over the closing price on the announcement date. The total expected acquisition amount is 2.1422 trillion won." He added, "As the container shipping market has entered a downturn, there is limited short-term momentum for the stock price. Therefore, it is highly likely that most HMM shareholders will participate in this share buyback."

The effective utilization of ample cash-equivalent assets is considered a key driver for supporting HMM's share price in the future. Ando noted, "So far this year, HMM has spent a total of 2.67 trillion won on dividends and share buybacks with cancellation. After the current buyback and cancellation, the remaining cash-equivalent assets, including other liquid financial assets, are estimated at 12.4 trillion won. Even considering HMM's long-term investment plans for 2030, liquidity remains sufficient."

Ando further stated, "Given the increased uncertainty in maritime logistics, it is unlikely that shipping rates will return to pre-COVID-19 levels. As a result, expectations for HMM's shareholder returns could rise. If additional shareholder return measures become visible in the future, there is potential to raise the target price."

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