Shipbuilding Stocks on a Smooth Ride Thanks to Market Recovery

Shipbuilding stocks shined in the Korean stock market although the overall KOSPI remained stagnant. Shipbuilding companies are on a smooth ride after a number of research reports claimed that the shipbuilding market is recovering with shipowners resuming offshore plant and tanker orders.

On June 12, the shares of Hanjin Heavy Industries rose 8.28 percent or 355 won to 4,645 won, while those of Samsung Heavy Industries, Doosan Engine, and Hyundai Mipo Dockyard rose 2.07 percent, 4.34 percent, and 0.47 percent, respectively.

Hanjin Heavy Industries, which signed a debt restructuring agreement with its creditors last year, is showing an improvement in sales activities. In March, the shipyard obtained an order for four VLCCs.

Kim Hyun, an analyst with Meritz Securities, said the shipyard is expected to take a full-fledged turnaround from next year.

Samsung Heavy Industries also signed a deal on June 2 to build a $2.5-billion offshore plant for the Coral FLNG project in Mozambique.
Source: The Korea Economic Daily