Yuantazongwook announced in a report released on May 25 that the target price of HD Korea Shipbuilding & Ocean Engineering (009540) had been lowered from ₩550,000 to ₩532,000. The investment strategy was maintained at “buy” and the previous day's closing price was ₩353,500, with a discount rate applied in the same year of 50 %.
The report calculated the target price based on market capitalization, emphasizing that HD Korea Shipbuilding & Ocean Engineering’s cash‑flow structure and the core focus on share repurchase and reduction were key. Researcher Kim Yong-min noted from an NAV perspective that the shares were priced low and that a discount rate of 60–70 % could be applied. He also evaluated that cash flow is needed for shareholder return, reflecting the company’s performance and dividend capacity.
HD Korea Shipbuilding & Ocean Engineering possessed the potential to expand cash flow through share repurchase and reduction as an intermediate subsidiary. The researcher mentioned that HD Hyundai and Hyundai Samho each hold net cash of ₩5 trillion and ₩2.7 trillion respectively, indicating that shareholder return becomes feasible in a growing market. He also emphasized that with “special dividend” cash supply and additional flexibility to mobilize the intermediate subsidiary’s equity, HD Korea Shipbuilding & Ocean Engineering can improve its capital efficiency.
HD Korea Shipbuilding & Ocean Engineering recently adjusted its business cooperation structure, planned to establish new block‑production plants such as Indigo Chipship with Indochin, and announced that a joint venture plant established last year would be maintained; the joint venture is expected to remain in engine supply and other technology and business cooperation separately. The report presented both the target price decline and shareholder return variables, and projected that future prices could vary according to cash flow and share repurchase and reduction activities.