If Q3 Earnings Decline, Should You Dump Shipbuilding Stocks? The Key Thing to Watch During Short-Term Corrections / US Warship MRO, the Real Market K-Shipbuilding Is Targeting | Research Fellow Eom Gyeong-a

Summary

In this interview, Eom Gyeong-a, a research fellow at ShinYoung Securities, explains why Korean shipbuilding stocks have been sluggish despite strong commercial ship orders. She argues that order fundamentals remain solid, Q3 earnings weakness is largely seasonal, and large shipbuilders are attractive after the recent correction. She also details the US warship MRO opportunity as a quiet bridgehead to future newbuild orders, and explains how BDI and freight-rate strength support ordering momentum. She prefers large shipbuilders over equipment and materials and highlights FX hedging differences among the big three.

• Korean shipbuilders' strong commercial orders have not driven share prices because volume growth is seen as limited.
• New high-value areas such as offshore plants, defense exports, and MRO are potential next catalysts.
• US warship MRO is already underway quietly and may build trust for future newbuild orders.
• BDI and freight rates are elevated on fuel costs and route complexity, supporting shipowner ordering.
• Q3 earnings may be off-season and working-day constrained, but are viewed as short-term noise.
• FX hedging makes Samsung Heavy and HD Hyundai relatively better defended in Q3, while Hanwha has the lowest hedge ratio.
• Eom prefers large shipbuilders over equipment and materials while sector sentiment is weak.
• Short-term weakness in large shipbuilders is viewed as a buying opportunity.