April 19, 2024

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[THE INVESTOR] Daewoo Shipping and Marine Engineering is steadily bagging new orders, said Eugene Investment and Securities on Aug. 30, maintaining a “buy” recommendation and 33,700 won (US$30.41) target price.

As of end-July, the amount of new orders reached US$3.53 billion. It has been winning orders worth an average of US$400 million every month since May and will have no difficulty reaching its annual target of US$7 billion solely from new orders. Among the three major shipbuilders, DSME not only has the most stable earnings but also at 50.4 percent, the highest rate of reaching target amount, and if the earnings stability is maintained in the latter half, investors should pay attention, said analyst Lee Sang-woo.

The rising price of vessels makes it an opportunity to purchase shipbuilding stocks. Although loss from the Romanian shipyard will be reflected in the third quarter and hurt its net profit, its current stock price is 0.8 times its price-to-book ratio, befitting that of a “top pick” in the industry, added the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)