Corporate Logo(source: hd-marineengine.com)
On the 10th, Daol Investment & Securities maintained a "BUY" rating on HD Hyundai Marine Engine(071970) and set a target price of 45,000 won, citing that the company’s sales are expected to grow 136% by 2026.
Daol Investment & Securities highlighted that while shipbuilders have already seen significant stock price appreciation amid the ongoing shipbuilding boom since 2021, marine engine manufacturers now present a more attractive investment opportunity. The firm explained that China's dominance in the container ship market has led to increased orders for Korean-made engines, along with higher pricing power. Additionally, Korean shipbuilders face constraints in expanding dock capacity, limiting their ability to increase production volumes, whereas the marine engine sector has the flexibility to expand output through facility investments.
HD Hyundai Marine Engine, formerly STX Engine, was acquired by HD Korea Shipbuilding & Offshore Engineering(009540) in August 2023. The company is a leading global manufacturer of low-speed marine engines, with an annual production capacity of 2 million horsepower. However, its actual output in 2023 was only 810,000 horsepower. On a consolidated basis, the company posted revenue of 308.1 billion won and an operating profit of 31.8 billion won, achieving an operating margin of over 10%.
Daol Investment & Securities expects HD Hyundai Marine Engine’s sales to surge significantly even if it handles only internal group orders. Additionally, it anticipates that by leveraging technical expertise from affiliated companies, the company will be able to reduce production lead times.
Choi Kwang-sik, an analyst at Daol Investment & Securities, noted, "If HD Hyundai Marine Engine prepares in 2025 and takes on just 50% of HD Hyundai Mipo(010620)'s orders in 2026, its sales could reach 860 billion won, marking a 136% increase compared to last year." He also pointed out that although its production lead time is currently about 30% slower than HD Hyundai Heavy Industries’(329180) Engine & Machinery Division, productivity improvements and knowledge transfer from affiliated companies could enable a more than 40% increase in production capacity.
*[KOSPI]HD Hyundai Marine Engine(071970)(formerly STX Heavy Industries) operates in the ship engine and engine parts industries. The company has a track record of producing various ship engines, including diesel engines, LNG gas engines, and LPG gas engines. It is a major manufacturer of low-speed marine engines in the global market. Its market capitalization is 876.9 billion won(as of March 7, 2025, closing price).
Corporate Logo(source: hd-marineengine.com)
On the 10th, Daol Investment & Securities maintained a "BUY" rating on HD Hyundai Marine Engine(071970) and set a target price of 45,000 won, citing that the company’s sales are expected to grow 136% by 2026.
Daol Investment & Securities highlighted that while shipbuilders have already seen significant stock price appreciation amid the ongoing shipbuilding boom since 2021, marine engine manufacturers now present a more attractive investment opportunity. The firm explained that China's dominance in the container ship market has led to increased orders for Korean-made engines, along with higher pricing power. Additionally, Korean shipbuilders face constraints in expanding dock capacity, limiting their ability to increase production volumes, whereas the marine engine sector has the flexibility to expand output through facility investments.
HD Hyundai Marine Engine, formerly STX Engine, was acquired by HD Korea Shipbuilding & Offshore Engineering(009540) in August 2023. The company is a leading global manufacturer of low-speed marine engines, with an annual production capacity of 2 million horsepower. However, its actual output in 2023 was only 810,000 horsepower. On a consolidated basis, the company posted revenue of 308.1 billion won and an operating profit of 31.8 billion won, achieving an operating margin of over 10%.
Daol Investment & Securities expects HD Hyundai Marine Engine’s sales to surge significantly even if it handles only internal group orders. Additionally, it anticipates that by leveraging technical expertise from affiliated companies, the company will be able to reduce production lead times.
Choi Kwang-sik, an analyst at Daol Investment & Securities, noted, "If HD Hyundai Marine Engine prepares in 2025 and takes on just 50% of HD Hyundai Mipo(010620)'s orders in 2026, its sales could reach 860 billion won, marking a 136% increase compared to last year." He also pointed out that although its production lead time is currently about 30% slower than HD Hyundai Heavy Industries’(329180) Engine & Machinery Division, productivity improvements and knowledge transfer from affiliated companies could enable a more than 40% increase in production capacity.
*[KOSPI]HD Hyundai Marine Engine(071970)(formerly STX Heavy Industries) operates in the ship engine and engine parts industries. The company has a track record of producing various ship engines, including diesel engines, LNG gas engines, and LPG gas engines. It is a major manufacturer of low-speed marine engines in the global market. Its market capitalization is 876.9 billion won(as of March 7, 2025, closing price).