Ask Warren

JONBUR Research · Initiation

HJ Shipbuilding & Construction · 097230 · Construction

HJ Shipbuilding & Construction: Earnings Recovery Meets a 46.4% One-Year Share Price Drop

Why this report

Start of coverage: one of the 300 largest companies, written once its financial statements were in.

HJ Shipbuilding & Construction's filed results show a move from losses in 2021-2023 to a TTM net income of ₩140.5B, yet the shares closed at ₩13,500 on 2026-10-12, down 46.4% over one year. A model estimate based on the assumptions shown is ₩32,056 per share, well above the current price, but free cash flow is negative and leverage is high.

Written Oct 13, 2026 · Data as of Oct 12, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

XfWATGr/in@

Thesis

The data supports a clear earnings turnaround. Operating margin rose from -5.0% in 2023 to 3.4% in 2025 and 6.2% on a TTM basis to H1 2026, and ROE reached 25.6%. The current P/E of 8.0 is far below the 34.1 at end-2025.

What the data does not explain is the share price fall. The stock is 15.6% lower over both one and three months and sits near its 52-week low of ₩12,910 (high ₩33,800). No news headlines are available, and investor flow, foreign ownership and short balance data are not available. Filings include amended lawsuit and major management matter disclosures dated 2026-10-12, but their contents are not in the data.

TTM free cash flow of -₩193.5B and liabilities-to-equity of 251.2% temper the profit picture.

Business overview

HJ Shipbuilding & Construction is listed on KOSPI and classified in the Construction sector in the data. It was founded on 2007-08-03 and listed on 2007-08-31, with 83,274,281 listed shares. The market cap is about ₩1.12T and enterprise value about ₩917.1B. CEOs are listed as 송경한 and 유상철.

Revenue was ₩1.71T in 2021, ₩1.79T in 2022, ₩2.16T in 2023, ₩1.89T in 2024 and ₩2.00T in 2025. TTM revenue to H1 2026 is ₩2.35T. Recent filings show frequent major sales or supply contract disclosures and amendments from August to October 2026. Contract details are not available in the data.

Financial analysis

These figures come from filed financial statements (DART).

Net income went from -₩139.8B in 2021 to -₩114.0B in 2023, then ₩5.3B in 2024 and ₩51.4B in 2025. TTM net income is ₩140.5B on operating income of ₩145.7B. TTM margins are 6.2% operating and 6.0% net. Revenue growth was 6.0% in 2025, after -12.8% in 2024 and 20.9% in 2023.

ROE improved from -31.4% in 2023 to 10.2% in 2025 and 25.6% TTM. At H1 2026, cash was ₩249.7B against borrowings of ₩42.6B. Liabilities-to-equity was 251.2%, so most obligations are not borrowings. Free cash flow was -₩193.5B, meaning profits have not yet turned into cash.

Valuation

Current multiples are P/E 8.0, P/B 1.5 and P/S 0.5. EV/EBITDA and dividend yield are not available. The year-end 2025 P/E was 34.1 and P/B 2.6, so both multiples are lower now.

Among peers, P/E is 24.9 for Hyundai E&C, 19.7 for GS E&C, 4.0 for DL E&C and 14.8 for KEPCO Plant Service & Engineering, with Daewoo E&C not available. Peer P/B ranges from 0.5 to 1.8. The company's P/B of 1.5 is within that range, while its P/E is below most peers.

The DCF model (5-year discounted cash flow, 7.5% rate, TTM to H1 2026) gives a model estimate based on the assumptions shown of ₩32,056 per share, with a bear case of ₩18,440 and a bull case of ₩55,024. All three are above the ₩13,500 close. This is not a target or a reason to buy or sell, and the estimate depends heavily on whether the recent profit level persists.

Catalysts

  • Repeated major sales or supply contract filings and amendments (most recently 2026-10-07) show ongoing order-related disclosures, though contract values are not in the data.
  • A filing on 2026-10-12 about a lawsuit filed or ruled, an amended disclosure, may affect how the market views legal exposure.
  • Two major management matter filings (2026-09-21 and 2026-10-12) could be relevant to investors once details are reviewed.
  • The next financial statements will show whether the H1 2026 TTM profit level and negative free cash flow trend continue.
  • An insider shareholding report was filed on 2026-09-02, and later insider filings could add information on ownership.

Risks

  • Profit history is volatile, with losses in 2021, 2022 and 2023 before the recent recovery, so the current margins may not be stable.
  • TTM free cash flow of -₩193.5B shows earnings are not converting to cash.
  • Liabilities-to-equity of 251.2% indicates a heavily liability-funded balance sheet.
  • The shares are down 46.4% in a year and near the 52-week low, and the data gives no explanation or flow information.
  • The model estimate rests on assumptions, and the bear case of ₩18,440 is itself above the current price, which suggests the inputs may be sensitive to the recent earnings jump.

Closing view

The filed numbers show a company that has moved from consecutive losses to a TTM operating margin of 6.2% and ROE of 25.6%, with multiples below its own year-end 2025 levels. The DCF model estimate of ₩32,056 sits well above the ₩13,500 price, but it relies on recent profit sustaining.

Against this, free cash flow is negative, leverage is high, the share price has fallen sharply, and the nature of the latest lawsuit and management filings is unknown from the data. The evidence is mixed and incomplete on investor flows and news, so the picture is one of improved earnings with unresolved questions about cash generation and market sentiment.

Model estimate of fair value

Bear
₩18,440
+54%
Base
₩32,056
+168%
Bull
₩55,024
+359%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 7.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 13, 2026InitiationStart of coverage (300 largest)HJ Shipbuilding & Construction: Earnings Recovery Meets a 46.4% One-Year Share Price Drop

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information