●Buy: Hyundai Heavy Industries
It’s a bargain chance to buy shares of Hyundai Heavy Industries, the world’s largest shipbuilder, says Korea Investment & Securities analyst Richard Park.
Hyundai reported disappointing second quarter results with sales of 6.05 trillion won and an operating profit of 677 billion won. Previously, local stock analysts had predicted an operating profit of 906 billion won, according to FNguide, a research firm. So the result was received as an earning shock, and Hyundai’s stock price ended at 417,500 won on Friday — down 23 percent from its peak in April.
But Korea’s Park says that it is no reason to get disappointed, adding that he was one of the few analyst who knew the second-quarter profit would be that low. The reason to be optimistic is that sales have increased over all its major business divisions — shipbuilding, engines, construction equipment and plants.
More good news for Hyundai shareholders is that the company has dropped the idea of buying Hynix, a semiconductor maker. Analysts had worried that Hynix would devour Hyundai’s cash reserves.