Hanwha Ocean, Doosan Enerbility, and Hanwha Aerospace hit yearly low closing prices on May 14, with Hanwha Ocean closing at 76,800 won, Doosan Enerbility at 70,900 won, and Hanwha Aerospace at 872,000 won, according to Korea Exchange data. The stocks recovered the following day as the KOSPI rebounded from the 6000 level to 7200, but remain down 43% to 49% from their recent 1-year highs. These defense, shipbuilding, and nuclear power stocks led last year's KOSPI rally but have underperformed this year as market gains concentrated in semiconductor stocks.
Hanwha Ocean, Doosan Enerbility, Hanwha Aerospace Record Yearly Low Closing Prices on May 14
Hanwha Ocean closed at 76,800 won on May 14, Doosan Enerbility at 70,900 won, and Hanwha Aerospace at 872,000 won, marking the lowest closing prices for each stock this year. The following day, Hanwha Ocean traded at 149,900 won (down 49% from its recent 1-year high), Doosan Enerbility at 136,400 won (down 48%), and Hanwha Aerospace at 1,537,000 won (down 43%).
These stocks led the KOSPI rally in the first half of last year, rising on expectations of increased US orders during tariff negotiations with the Trump administration. The rally momentum slowed in the second half as Samsung Electronics and SK Hynix began their own rallies, and this year's "semiconductor duopoly" has driven continued declines in the defense, shipbuilding, and nuclear sector stocks.
Securities Firms Lower Target Prices While Maintaining Positive Sector Outlook
Securities firms have lowered target prices in line with the stock declines. Hanwha Aerospace's target price fell from near 2 million won as of May to 1.4 million won recently. Hanwha Ocean's target dropped from 180,000 won to 110,000 won, and Doosan Enerbility's from the 160,000 won range to 130,000 won.
Han Young-soo, researcher at Samsung Securities, stated that "from a fundamental perspective, conditions for a stock price rebound have been met, and above all, order indicators continue to show unexpected strength." He noted that "global ship orders in the first half of this year increased 88% year-on-year despite a high base, recording the largest first-half total ever, and domestic individual companies have already secured orders equivalent to 81% of last year's annual orders."
Han added that "even though we lowered target prices by adjusting valuation multiples, significant upside potential remains, suggesting the recent correction was excessive."
Analysts Cite Strong Shipbuilding Order Data and Expected Defense Sector Momentum
Kang Tae-ho, researcher at DS Investment Securities, stated that "this year, the defense industry has shown clear weakness versus the KOSPI due to continued large order gaps, concerns about NATO entry barriers following the failure to win the Canadian submarine project, and concerns about contract delays to the Middle East due to prolonged Middle Eastern wars." He added that "what the market worries about most is new order delays, but unlike the first half, multiple order momentum for all five defense companies is expected to materialize in the second half."
Regarding the nuclear power sector, Lee Min-jae, researcher at NH Investment & Securities, stated that "the US government clearly has the will and is working hard to revive the nuclear power industry, but due to the project structure, participation by the Korean and Japanese governments and companies is essential." He noted that "insufficient SPC investment companies, lack of core equipment manufacturing capacity, and limited construction capacity and experience are problems difficult to solve without our cooperation, so the Trump administration is likely to focus efforts on reviving the nuclear power industry ahead of midterm elections, and our participation is also expected to become clear."
FAQ
What closing prices did Hanwha Ocean, Doosan Enerbility, and Hanwha Aerospace record on May 14?
On May 14, Hanwha Ocean closed at 76,800 won, Doosan Enerbility at 70,900 won, and Hanwha Aerospace at 872,000 won, marking yearly lows for each stock according to Korea Exchange data.
How have securities firms adjusted target prices for these stocks?
Securities firms have lowered target prices following the stock declines. Hanwha Aerospace's target fell from near 2 million won as of May to 1.4 million won recently, Hanwha Ocean's dropped from 180,000 won to 110,000 won, and Doosan Enerbility's declined from the 160,000 won range to 130,000 won.
What shipbuilding order data did Samsung Securities cite?
Samsung Securities researcher Han Young-soo stated that global ship orders in the first half of this year increased 88% year-on-year despite a high base, recording the largest first-half total ever, and domestic individual companies have already secured orders equivalent to 81% of last year's annual orders.
