By Park Si-soo
The stock prices of Korean shipbuilders continue to decline amid growing speculation that they may report worse-than-expected earnings for the second quarter.
Another element pulling the prices downward is their weakening position in both low and high-end markets ㅡ Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering are increasingly challenged by Chinese rivals in the low-priced ship market, while Japanese shipbuilders are quickly eating into the high-end vessel market that was once dominated by Korean companies.
Hyundai, the world's biggest shipbuilder, saw its stock price fall 1.68 percent or 3,000 won on Monday to close at 176,000 won, only 4,000 won above the firm's three-year-low point of 172,000 won marked on June 28 last year.
Samsung experienced a 2 percent or 550 won fall to close at 26,900 won on the same day, a 43 percent plunge from its one-year peak of 45,800 won on Oct. 17 last year.
Daewoo also suffered a 4.49 percent or 1,200 won fall to close at 25,550 won, posing to break its three-month-low of 24,600 won on June 5.
Korean shipbuilders are expected to announce their second quarter earnings at the end of the month.
Dim outlook
According to data compiled by financial information provider FnGuide, the combined second-quarter operating income for the country's top five shipyards was estimated at 286 billion won ($283 million).
Hyundai is expected to have logged an operating income of 25 billion won during the April-June period, a sharp drop of 91.4 percent from a year earlier, and Samsung may report 187 billion won in operating income, also 35 percent down from a year earlier, according to the data.
Daewoo's second-quarter operating income is estimated at 125 billion won, also down 1.79 percent from a year earlier.
"Their business performance may not improve sharply this year due to delivery of low-priced ships," said Lee Kang-rok, an analyst at KTB Investment & Securities. "In addition, there are fewer new orders, which is putting pressure on their stock prices."
The data also show that they have combined orders valued at $10.33 billion through May this year, achieving 22.7 percent of their targets for the year. Hyundai has logged $4.53 billion worth of orders in the first five months of the year, equivalent to 28.2 percent of its annual target of $16.05 billion. Samsung has bagged orders totaling $3.9 billion during the same period, and Daewoo has clinched $1.9 billion worth of orders.
Other data from global market researcher Clarkson Research Services shows that Korean shipbuilders were overtaken by their Chinese rivals in terms of new orders secured in the first half of the year. It shows they also fell behind Japanese shipbuilders in June.
Korean shipyards clinched new orders for 164 ships totaling 5.55 million compensated gross tons (CGTs) in the January-June period, down 29.5 percent from 230 ships totaling 7.87 million CGTs a year ago, according to data by global market researcher Clarkson Research Services.
During the same period, their share of global ship orders fell to 27.1 percent from 31.8 percent.
In contrast, Chinese shipbuilders won orders for 481 ships amounting to 9.09 million CGTs, increasing their share to 44.4 percent from 39.9 percent.
CGT, an indicator of the amount of work needed to build a given ship, is used as a tool to compare inter-country shipbuilding output. This is the generally used measure for the volume of orders received.
In terms of the value of new orders, Chinese shipbuilders took $14.5 billion in new orders in the first half, outdoing $13.2 billion for South Korean competitors.
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Another element pulling the prices downward is their weakening position in both low and high-end markets ㅡ Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering are increasingly challenged by Chinese rivals in the low-priced ship market, while Japanese shipbuilders are quickly eating into the high-end vessel market that was once dominated by Korean companies.
Hyundai, the world's biggest shipbuilder, saw its stock price fall 1.68 percent or 3,000 won on Monday to close at 176,000 won, only 4,000 won above the firm's three-year-low point of 172,000 won marked on June 28 last year.
Samsung experienced a 2 percent or 550 won fall to close at 26,900 won on the same day, a 43 percent plunge from its one-year peak of 45,800 won on Oct. 17 last year.
Daewoo also suffered a 4.49 percent or 1,200 won fall to close at 25,550 won, posing to break its three-month-low of 24,600 won on June 5.
Korean shipbuilders are expected to announce their second quarter earnings at the end of the month.
Dim outlook
According to data compiled by financial information provider FnGuide, the combined second-quarter operating income for the country's top five shipyards was estimated at 286 billion won ($283 million).
Hyundai is expected to have logged an operating income of 25 billion won during the April-June period, a sharp drop of 91.4 percent from a year earlier, and Samsung may report 187 billion won in operating income, also 35 percent down from a year earlier, according to the data.
Daewoo's second-quarter operating income is estimated at 125 billion won, also down 1.79 percent from a year earlier.
"Their business performance may not improve sharply this year due to delivery of low-priced ships," said Lee Kang-rok, an analyst at KTB Investment & Securities. "In addition, there are fewer new orders, which is putting pressure on their stock prices."
The data also show that they have combined orders valued at $10.33 billion through May this year, achieving 22.7 percent of their targets for the year. Hyundai has logged $4.53 billion worth of orders in the first five months of the year, equivalent to 28.2 percent of its annual target of $16.05 billion. Samsung has bagged orders totaling $3.9 billion during the same period, and Daewoo has clinched $1.9 billion worth of orders.
Other data from global market researcher Clarkson Research Services shows that Korean shipbuilders were overtaken by their Chinese rivals in terms of new orders secured in the first half of the year. It shows they also fell behind Japanese shipbuilders in June.
Korean shipyards clinched new orders for 164 ships totaling 5.55 million compensated gross tons (CGTs) in the January-June period, down 29.5 percent from 230 ships totaling 7.87 million CGTs a year ago, according to data by global market researcher Clarkson Research Services.
During the same period, their share of global ship orders fell to 27.1 percent from 31.8 percent.
In contrast, Chinese shipbuilders won orders for 481 ships amounting to 9.09 million CGTs, increasing their share to 44.4 percent from 39.9 percent.
CGT, an indicator of the amount of work needed to build a given ship, is used as a tool to compare inter-country shipbuilding output. This is the generally used measure for the volume of orders received.
In terms of the value of new orders, Chinese shipbuilders took $14.5 billion in new orders in the first half, outdoing $13.2 billion for South Korean competitors.
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