Corporate Logo(source: hanwha-engine.com)
SK Securities maintained a "Buy" rating and a target price of 32,000 KRW on Hanwha Engine (082740) on April 22, citing expectations of record-high order volume this year and solid short- to long-term growth. With the stock closing at 24,400 KRW in the previous session, the target implies an upside potential of 31.3%.
Analyst Han Seung-Han at SK Securities stated, “As of the first quarter, the company has already secured new engine orders worth 1.0587 trillion KRW, representing 64% of last year’s total order volume of 1.649 trillion KRW.” He added that more than 90% of the contracts signed so far this year are estimated to be for Chinese shipyards, and that orders from Korean shipbuilders have yet to commence—implying a strong likelihood of achieving the highest order volume in company history.
He also noted that engine orders related to North American LNG carrier (LNGC) contracts, expected to ramp up in the second half of the year, will likely begin from next year, supporting a continued high level of order inflows and backlog.
According to Han, Hanwha Engine is positioned for a multi-phase growth trajectory: short-term expansion due to China’s ongoing engine shortage, medium-term growth driven by eco-friendly engine replacements mandated by IMO regulations, and long-term growth fueled by the aging global fleet and the need for replacement cycles.
“The decline in pricing (P) due to a slowdown in container ship orders can be sufficiently offset by a rise in volume (Q) as low-output bulk carrier and tanker engines are used to fill expanded production lines,” he said. “Given U.S. sanctions on Chinese shipbuilders, IMO environmental regulations, and growing replacement demand, Hanwha Engine is expected to maintain stable order volumes and a strong share of DF engine contracts.”
In the first quarter of 2025, Hanwha Engine reported revenue of 318.2 billion KRW, up 8.5% year-on-year, and operating profit of 22.3 billion KRW, up 14.8%. Both figures slightly exceeded consensus estimates.
The analyst noted, “The company delivered 30 engines in the first quarter—two fewer than the 32 units delivered in Q4 2024, as 2–3 units were deferred to Q2. Still, sales fell by only 2.5%, thanks to a higher average selling price (ASP), supported by an increase in high-margin projects, including one methanol DF engine.” He also cited favorable foreign exchange effects due to a strong won-dollar rate.
While non-marine engine revenue fell 3.8% from the previous quarter, high-margin after-market (AM) sales rose approximately 14% year-on-year, contributing to robust top-line growth.
*[KOSPI]Hanwha Engine(082740) is a comprehensive engine production specialist, currently engaging in ship engine manufacturing, parts sales, diesel power generation, and environmental pollution prevention facilities(SCR, selective catalytic reduction) as its main businesses. Its market capitalization is 2.03 trillion won(as of April 21, 2025, closing price).
Corporate Logo(source: hanwha-engine.com)
SK Securities maintained a "Buy" rating and a target price of 32,000 KRW on Hanwha Engine (082740) on April 22, citing expectations of record-high order volume this year and solid short- to long-term growth. With the stock closing at 24,400 KRW in the previous session, the target implies an upside potential of 31.3%.
Analyst Han Seung-Han at SK Securities stated, “As of the first quarter, the company has already secured new engine orders worth 1.0587 trillion KRW, representing 64% of last year’s total order volume of 1.649 trillion KRW.” He added that more than 90% of the contracts signed so far this year are estimated to be for Chinese shipyards, and that orders from Korean shipbuilders have yet to commence—implying a strong likelihood of achieving the highest order volume in company history.
He also noted that engine orders related to North American LNG carrier (LNGC) contracts, expected to ramp up in the second half of the year, will likely begin from next year, supporting a continued high level of order inflows and backlog.
According to Han, Hanwha Engine is positioned for a multi-phase growth trajectory: short-term expansion due to China’s ongoing engine shortage, medium-term growth driven by eco-friendly engine replacements mandated by IMO regulations, and long-term growth fueled by the aging global fleet and the need for replacement cycles.
“The decline in pricing (P) due to a slowdown in container ship orders can be sufficiently offset by a rise in volume (Q) as low-output bulk carrier and tanker engines are used to fill expanded production lines,” he said. “Given U.S. sanctions on Chinese shipbuilders, IMO environmental regulations, and growing replacement demand, Hanwha Engine is expected to maintain stable order volumes and a strong share of DF engine contracts.”
In the first quarter of 2025, Hanwha Engine reported revenue of 318.2 billion KRW, up 8.5% year-on-year, and operating profit of 22.3 billion KRW, up 14.8%. Both figures slightly exceeded consensus estimates.
The analyst noted, “The company delivered 30 engines in the first quarter—two fewer than the 32 units delivered in Q4 2024, as 2–3 units were deferred to Q2. Still, sales fell by only 2.5%, thanks to a higher average selling price (ASP), supported by an increase in high-margin projects, including one methanol DF engine.” He also cited favorable foreign exchange effects due to a strong won-dollar rate.
While non-marine engine revenue fell 3.8% from the previous quarter, high-margin after-market (AM) sales rose approximately 14% year-on-year, contributing to robust top-line growth.
*[KOSPI]Hanwha Engine(082740) is a comprehensive engine production specialist, currently engaging in ship engine manufacturing, parts sales, diesel power generation, and environmental pollution prevention facilities(SCR, selective catalytic reduction) as its main businesses. Its market capitalization is 2.03 trillion won(as of April 21, 2025, closing price).