HD Korea Shipbuilding & Offshore Engineering: Strong Earnings Recovery as Shares Fall 32.0% Over One Year

Thesis

The data supports a sharp improvement in profitability. Operating income went from a loss of ₩1.4T in 2021 to ₩3.9T in 2025 and ₩5.1T on a trailing basis to H1 2026. Return on equity rose to 26.6%. The share price has moved the other way: down 22.8% in one month, 17.4% in three months and 32.0% in one year, closing at ₩282,000 against a 52-week range of ₩276,500 to ₩494,500. The data does not explain the decline. Investor flows, foreign ownership and short interest are not available, so we cannot say who is selling. The stock now trades at lower multiples than its year-end 2025 P/E of 13.3 and P/B of 2.2. Whether the trailing earnings are sustainable cannot be judged from this data, which has no order backlog or guidance figures.

Business overview

The company is listed on KOSPI and classed in the data as a holding company. It was founded on 1973-12-28 and listed on 1999-08-24, with 70,773,116 listed shares. It is led by co-CEOs 정기선 and 김형관. Market capitalisation is ₩19.96T. Revenue grew from ₩15.5T in 2021 to ₩29.9T in 2025, and trailing revenue to H1 2026 is ₩32.8T. Recent filings include several amended major sales or supply contract disclosures (latest 2026-10-13), preliminary earnings on 2026-09-14, a subsidiary new facility investment item, and a subsidiary serious accident report dated 2026-08-31. The contract details are not in the data.

Financial analysis

These figures come from filed financial statements (DART). Revenue rose from ₩17.3T in 2022 to ₩21.3T in 2023, ₩25.5T in 2024 and ₩29.9T in 2025, with growth of 23.1%, 19.9% and 17.2% in 2023-2025. Operating income moved from -₩355.6B in 2022 to ₩282.3B in 2023, ₩1.43T in 2024 and ₩3.90T in 2025. Operating margin rose from -2.1% in 2022 to 1.3%, 5.6% and 13.0%. Net income was ₩2.17T in 2025. Trailing to H1 2026, revenue is ₩32.8T, operating income ₩5.1T (15.5% margin), and net income ₩3.4T (10.5% margin). ROE is 26.6%. Liabilities to equity is 146.9%. Cash is ₩11.0T and free cash flow is ₩4.7T. Borrowings are not available.

Valuation

The current P/E is 5.8, P/B 1.3 and P/S 0.6. Dividend yield is 5.3%. Enterprise value is ₩8.96T, while EV/EBITDA is not available. At year-end 2025 the P/E was 13.3 and P/B 2.2, so both multiples are lower now, though earnings have also grown. Year-end multiples for earlier years are not available. The peers listed are SK Square (P/E 4.0, P/B 2.4), KB Financial (9.9, 1.0), Shinhan Financial (9.1, 0.8), SK (4.9, 1.1) and Hana Financial (8.6, 0.8). They are mostly financial and holding companies, so the comparison is imperfect. The P/E of 5.8 sits within that group's range, and the P/B of 1.3 is mid-range.

Catalysts

• Repeated amended major sales or supply contract filings, most recently on 2026-10-13, suggest contract activity that could affect revenue visibility, though amounts are not in the data.
• Preliminary earnings filed on 2026-09-14 are the latest results update, with H1 2026 trailing figures showing a 15.5% operating margin.
• A subsidiary new facility investment filing on 2026-09-10 points to capital spending plans, although the size is not available.
• A response to a rumour or news report was filed on 2026-09-17, and further clarification could matter to sentiment.
• A Newsis headline on 2026-10-13 says operating profit is on track to exceed the prior year's full-year result, alongside caution about uncertainty.

Risks

• The share price is near its 52-week low after falling 22.8% in a month, and the data gives no cause for the decline.
• Investor flows, foreign ownership and short balance are not available, so selling pressure cannot be assessed.
• A serious accident was reported at a subsidiary on 2026-08-31, which could bring operational or regulatory consequences not detailed in the data.
• The margin rise from -2.1% in 2022 to 15.5% trailing may not persist, and the data has no backlog or guidance.
• Liabilities are 146.9% of equity and borrowings are not available, limiting the view of leverage.

Closing view

The filed numbers show a clear turnaround in revenue, margins and returns, with solid cash and free cash flow. The market has moved sharply against the stock, and multiples have compressed from year-end 2025 levels. The data cannot say whether this reflects concerns about earnings durability, flows or other factors, since backlog, flows and guidance are missing. The evidence is a strong recent record set against a weak price trend and several unknowns.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationHD Korea Shipbuilding & Offshore Engineering: Strong Earnings Recovery as Shares Fall 32.0% Over One Year