071970 - Korea Stock Market Insights

What Happened at HD Hyundai Marine Engine?

On September 3, 2025, the stake of HD Korea Shipbuilding & Offshore Engineering (including related parties), the largest shareholder of HD Hyundai Marine Engine, slightly decreased from 35.09% to 35.08%. This was due to the sale of 995 shares by a related party, Mr. Kim Seong-won.

Why are Stake Changes Important?

Changes in the largest shareholder’s stake can significantly impact stock prices as they suggest a potential shift in management control. However, this change is only 0.01%, and HD Korea Shipbuilding & Offshore Engineering still maintains a strong 35.08% stake. The possibility of a management change is low, and it is more likely a simple supply and demand transaction.

So, What’s the Stock Forecast?

In the short term, there is a possibility of a stock price decline due to the sale of shares, but the impact is expected to be limited due to the small volume. Instead, it’s important to focus on the company’s strong fundamentals (24% increase in sales in the first half of 2025, increasing demand for eco-friendly engines, and a high order backlog). The rising USD/KRW exchange rate is also a positive factor.

What Should Investors Do?

Positive Factors: Growth of the eco-friendly marine engine market, synergy effects from joining the HD Hyundai Group, and a robust order backlog.
Risk Factors: Operating rate of the Turbocharger business unit, concentration of major customers, and exchange rate volatility.
Key Investment Strategy: Invest with a long-term perspective without being swayed by short-term volatility. Continuously monitor market share in eco-friendly engines, global shipbuilding market conditions, and exchange rate trends.

1. HME’s 2025 Performance Outlook: Can it Maintain Strong Q3 Results?

HME has shown remarkable growth up to Q3 2025. Thanks to increased demand for marine engines and high production capacity utilization, it achieved a 35% year-on-year increase in revenue and a significant increase in operating profit. However, the projected annual revenue of KRW 396 billion appears somewhat conservative considering the Q3 performance. Can HME maintain this growth momentum through the end of the year?

2. HME Investment Risk Analysis: What Factors Could Hinder Growth?

Increasing Dependence on the Chinese Market: A downturn in the Chinese shipbuilding market could severely impact HME’s performance. A thorough analysis of the declining China Containerized Freight Index is necessary.
Rising Volatility in Raw Material Prices: Increasing prices of raw materials such as steel and crude oil are putting pressure on HME’s profitability. The rising Baltic Dirty Tanker Index is also adding to cost burdens.
Exchange Rate Volatility: Fluctuations in the KRW/USD and KRW/EUR exchange rates significantly affect HME’s profitability as an exporting company. Therefore, its foreign exchange risk management strategy needs to be reviewed.
Potential for a Global Recession: Interest rate hikes and a potential recession in the US and Europe could lead to decreased demand in the shipbuilding market, negatively affecting HME’s performance.

3. HME Investment Strategy: Seizing Opportunities Amidst Uncertainty

HME is focusing on securing future growth engines, such as investing in eco-friendly engines. It remains to be seen whether these efforts will lead to enhanced market competitiveness. It is also important to check the 2025 annual operating profit and net profit forecasts, which have not yet been released, and to reassess HME’s financial stability. Before making any investment decisions, exercise caution and consult the latest market information and expert opinions.

Tag: 071970

HD Hyundai Marine Engine Stock Forecast: Analyzing the Impact of Stake Changes and Investment Strategies