- HD Hyundai and its subsidiaries, including HD Hyundai Heavy Industries, have seen significant stock increases, with HD Hyundai Heavy Industries rising 68% this year.
- The shipbuilding industry, after years of decline, is experiencing a boom, driven by high-value ship orders such as LNG and ammonia carriers.
- Shipbuilding equipment suppliers, like Sejin Heavy Industries and Hanwha Engine, are also benefiting, with Sejin’s stock up 81% due to increased orders.
The shipbuilding industry is undergoing a remarkable resurgence, marked by a supercycle that has significantly boosted the stock performance of major players like HD Hyundai and its subsidiaries. HD Hyundai Heavy Industries has experienced a 68% rise in stock value this year, reflecting the sector’s strong performance. This resurgence is fueled by a shift towards high-value ships, such as LNG and ammonia carriers, which has led to a steady increase in ship prices and a growing backlog of orders, reports Maeil Business Newspaper.
Shipbuilding Supercycle
Concurrently, companies supplying shipbuilding equipment are thriving. For instance, Sejin Heavy Industries has seen its stock soar by 81% due to rising demand for LPG tanks and other ship components. Hanwha Engine, which supplies engine parts, has also benefited, with a 51% increase in its stock price. This trend indicates a robust recovery and growth potential for the shipbuilding industry and its associated sectors.
As the shipbuilding industry enters a “super cycle,” marked by unprecedented performance levels, companies across the shipbuilding value chain are also experiencing significant growth. HD Hyundai, which includes the prominent HD Hyundai Heavy Industries, saw its stock peak at 85,000 won, reflecting a remarkable 68% increase from the beginning of the year. HD Korea Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries also reported substantial stock price increases, of 79% and 48%, respectively.
This surge in the shipbuilding sector follows years of decline and restructuring. Since the global ship replacement orders of 2008 and the subsequent impacts of dropping oil prices and reduced orders, the industry has struggled. However, recent trends have shifted, with shipbuilders focusing on high-value ships like LNG carriers and ammonia ships, leading to a robust increase in new ship prices. As of June, the new shipbuilding index reached 187.23, nearing the peak levels observed during the early 2000s boom.
The positive momentum extends beyond shipbuilders to equipment suppliers. Sejin Heavy Industries, known for manufacturing LPG tanks and deckhouses, saw its stock rise 81% due to increased orders. Similarly, Dongsung Industrial Technology and Korea Carbon, which produce cold insulation materials for LNG carriers, are thriving as demand for LNG transport grows. Hanwha Engine, which specializes in engine parts, also experienced a 51% stock increase, partly due to the reliability of its products amid issues with Chinese-made engines.
Other companies like Sungkwang Bend and Taekwang, which manufacture pipe fittings for LNG carriers, are anticipated to see improved performance in the latter half of the year. The overall sentiment in the market is optimistic, with expectations that the shipbuilding industry’s performance will continue to improve, driven by lower input costs and enhanced productivity. Choi Kwang-sik from Daol Investment & Securities predicts that the sector’s resurgence is just beginning and will likely persist through 2026.
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Source: Maeil Business Paper
