South Korean shipyards have failed to defend annual leadership in the number of vessel orders, although profit surged as orders were mainly in high-performance and green-fuel transportation, boding well for the stocks and outlook amid faster green migration at sea.
According to British shipbuilding and marine industry tracker Clarkson Research Services on Sunday, Korean shipbuilders bagged combined 403 orders in 17.35 million CGT in 2021, accounting for 38 percent of the total 1,846 orders in 45.73 million CGT placed in the world last year.
China topped with the largest amount of 22.8 million CGT or 965 orders, 50 percent of the total.
Korea’s lead for the last three years was replaced by China which swept most of the container carrier orders that jumped more than 10-fold amid a surge in marine shipping costs. Korean shipbuilders instead focused on high value-added vessels like LNG carriers for better profitability.
Orders brimmed mostly in the first half of last year. Korean shipyards won 5.79 million CGT or 34 percent in the first quarter, 5.27 million CGT or 30 percent in the second quarter, 3.66 million CGT or 21 percent in the third quarter and 2.63 million CGT or 15 percent in the fourth quarter.
By company, Korea Shipbuilding & Offshore Engineering Co. drew $6 billion worth orders in the first quarter, $8 billion worth in the second quarter, $5.9 billion in the third quarter, and $2.9 billion in the fourth quarter. Daewoo Shipbuilding & Marine Engineering netted $1.79 billion worth order in the first quarter, $3.71 billion worth in the second quarter, $2.54 billion worth in the third quarter, and $2.82 billion worth in the fourth quarter.
Analysts are upbeat about shipbuilding stocks in new year.
The big three stocks last year all saw a double-digit loss in their prices – KSOE with minus 14 percent, Samsung Heavy Industries with -17.71 percent, and Daewoo Shipbuilding & Marine Engineering with -17.24 percent.
Among the stocks, Hyundai Mipo Dockyard was most favored by three securities firms. The market consensus for its stock price was at 97,231 won ($81.65) as of Dec. 31, up 38.9 percent of the current price, according to Seoul-based financial data provider FnGuide.
Hanwha Investment & Securities estimated Hyundai Mipo Dockyard’s operating profit will reach 131 billion won after successfully reversing from a loss a year earlier this year with sales up 25 percent on year to total 3.53 trillion won.