[Click e-Stock] "Now Is the Opportunity Amid Volatile Energy Supply"... This Stock Remains Undervalued

Hana Securities has raised its target price for Pan Ocean from 7,000 won to 9,000 won, while maintaining its "Buy" investment rating.

On May 20, Ando Hyun, a research analyst at Hana Securities, explained, "This is the result of raising the price-to-book ratio (PBR) from 0.6 times to 0.8 times," adding, "We estimate that operating profit in the energy sector, excluding very large crude carriers (VLCC), will increase by more than 70 billion won this year, and that investments in VLCC will also boost return on equity (ROE) going forward."

Recently, as global energy supply and demand has become unstable due to the U.S.-Iran war, interest in energy shipping companies has increased, raising Pan Ocean’s presence in the market. Ando further stated, "With long-term liquefied natural gas (LNG) carrier contracts reflected this year, we expect annual operating profit of about 192 billion won. In addition, we can look forward to Korea Gas Corporation placing new LNG carrier charter contracts for additional LNG imports within this year."

He continued, "Freight rates for tanker and chemical carriers are expected to surge before and after the reopening of the Strait of Hormuz, so this will provide the greatest upside for earnings this year." He estimated annual operating profit from the tanker division to be 100 billion won, noting that depending on the timing of the reopening of Hormuz, there is additional upside, and that sustained high demand for tankers until the normalization of traffic through Hormuz is positive for the company.

From the second half of this year, Pan Ocean will also begin VLCC operations. Ando noted, "Pan Ocean purchased 10 secondhand VLCCs from SK Shipping, and the remaining terms for long-term charter contracts with companies such as SK Energy are about 2 to 4 years." He added, "After these contracts expire, Pan Ocean is expected to fully begin VLCC operations." He emphasized, "It is significant that Pan Ocean’s portfolio as an energy shipping company is expanding," and projected, "The VLCC market will remain a supply-side market in favor of suppliers through 2030."

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