No earnings concerns through 2028; the trigger to make shipbuilding stocks break previous highs is 'this' / Will Hanwha Ocean really take off overseas? | Shinyoung Securities Research Fellow Eom Kyung-ah

Summary

Eom Kyung-ah of Shinyoung Securities discusses the Korean shipbuilding sector, focusing on U.S. warship order opportunities, Chinese competition, overseas production strategies, and Hanwha Ocean's direct overseas expansion. She expects Korean shipbuilding stocks to break previous highs in the first half on order wins and earnings, with special vessel orders as the key 2025 catalyst. She sees earnings visibility through 2027 and possible 2028 revenue growth, while warning that order momentum must be sustained.

• U.S. naval budget is about $40 billion; Korean yards could win up to $10 billion per year.
• China remains a major low-cost competitor, while security concerns may push non-China orders to Korea.
• Korean yards are shifting some low-cost production to Southeast Asia and India.
• Hanwha Ocean is pursuing direct overseas ownership through Philly Shipyard and an Austal stake.
• Shipbuilding stocks need order wins and earnings to break prior highs.
• Special vessel and defense orders are the key 2025 keyword.
• Earnings concerns are limited through 2027; 2028 revenue may level up.
• The sector may be first-half weighted, with caution later in the year.