The global shipbuilding boom has boosted the value of shipbuilders and equipment makers, but it is also causing delays in sales and investment deals. A widening gap between investor expectations and corporate valuations is making transactions more difficult to finalize.
STX Engine’s Soaring Valuation
STX Engine, a major producer of ship power generation engines, has seen its share price more than double over the past year. Its market capitalization has risen from around 760 billion won in September last year to over 1.6 trillion won as of September 25. UAMCO, the company’s largest shareholder with a 64.17% stake, had planned to sell its equity but has put the deal on hold, citing the sharp rise in value. While STX Engine’s price-earnings ratio (25.11 times) is still lower than Hanwha Engine (40.05 times) and HD Hyundai Marine Engine (30.15 times), potential buyers view the current valuation as too expensive.
Acquisition Prospects and Industry Outlook
Analysts believe that if Hanwha Engine were to acquire STX Engine, the synergy could be significant. Hanwha specializes in low-speed engines for large vessels, while STX Engine produces medium-speed engines for mid-sized ships and generators. This would allow Hanwha to diversify its portfolio. However, Hanwha has officially stated it has no plans to acquire STX Engine or develop medium-speed engines independently, leaving the future of the sale uncertain.
While the shipbuilding sector continues to benefit from robust demand, inflated valuations are complicating equity sales and acquisitions. The stalled sale of STX Engine underscores the tension between rising market prices and investor caution, a dynamic likely to persist as the shipbuilding boom reshapes industry strategies.
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Source: CHOSUN BIZ
