Thought shipbuilding stocks were over? Why you need to look again now | Yoo Jae-sun, Senior Research Fellow, Hana Securities Research Center

Summary

Yoo Jae-sun, Senior Research Fellow at Hana Securities, presents a bullish view on Korean shipbuilding stocks, arguing the recent pullback is a rotation-driven opportunity rather than a peak. He highlights a potential Canadian defense contract catalyst for Hanwha Ocean, AI data center engine orders for HD Hyundai Heavy, and the deep undervaluation of HD Korea Shipbuilding. He also sees KEPCO improving as input costs ease.

• Korean shipbuilding stocks corrected recently not due to fundamentals but because of market rotation away from former leaders.
• The Canadian CPSP project decision this month could be a major catalyst, especially for Hanwha Ocean, offering asymmetric upside.
• HD Hyundai Heavy's engine division has won data center gas engine orders, linking the shipbuilding name to AI infrastructure demand.
• HD Korea Shipbuilding is called deeply undervalued, with a dividend yield about double that of HD Hyundai Heavy and strong dividend growth potential.
• Earnings for major Korean shipbuilders are expected to trend upward through 2027–2028 with no peak-out signals.
• LNG carrier and high-value ship markets remain supply-constrained, favoring Korean yards with technological leadership.
• KEPCO's outlook is improving as crude oil and raw material prices have declined, easing cost pressures and sentiment.
• Trump's comments about building US Navy ships in Korea lack concrete follow-through and should not drive investment decisions.