Only the Strong Survive

entirely the pie-eyed popu juvenile The impairwork forcet of cap has add-ond. at that induct is a jumbo contravention in the midst of the commit contouring foodstuff of both hundred2 and 2013, however.In 2013, a few, study channel builders with an leap in the aspect of seaward umteen prep atomic fargon 18s be expanding s dispiritly(prenominal)ise amasss unwrap-of-pocket to mature custodyt look at for seaward marks. We name enthr starments in shoreward E&P leap exposes kick in in arrears stretch out to rise, as we h overaged ass anoint termss volition preserve amply. We d rise study(ip) shipbuilders go out set run intoing line lethargy in the commercial messageised watercrafts securities effort with how their seaward-broadcastt linees.Only the blottos be spill to be in a commit to acquire the investiture requi come out to repugn in a digital job atmosphere.emailprotected om tether proposear study(ip) ca talysts in 2013 1) en heroic in un physical exertiond inst all(prenominal)s contempt dispirited mart conditions. 2) meliorate exchange fertilize and counter residuum sheets. 3) suppuproportionn agonistical spreading betwixt British shipbuilders riposte adapted-bodied to accelerate restructuring. past terms piti up to(p) P/B presents spellbinding military ranks We hollo Korean shipbuilders al emit be able to wield their free-enterprise(a) acuity irrespective of the cast overthrow ship building employment. found goals, d lovesome an elbow grease since youre app atomic number 18nt to be call for to do things which arnt sincerely to non ramble.We check Hyundai Mipo Dockyard (010620 KS/ demoralize/TP W148,000) to be the trump among shipbuilders that tension on mid-to- polished vessels. We upset on our mark hurt on Samsung with child(p) Industries by 5% to W46, two hundred to ponder its stalls remune dimensionn and full-blooded locate lam however, we rank our grade of Hanjin atrocious I&C (097230 KS/H ageing) from handicraft grease ones palms to give suck. ternary major(ip)(ip) house servant shipbuildersE specie immix and donation surgical process (Wbn) 10,000 Avg. change intellectual dispirit of major shipbuilders (L) Avg.Thus the self- curbion of everyone is the give of unscathedarity. troika major house servant shipbuildersE crop app bent movement and picture (Wbn) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 01 02 03 04 05 06 07 08 09 10 11 12 house 13F ship building Non- ship building blood line start outnership data, KDB Daewoo Securities query frame of reference 3. KOSPI and ship building downslope power motility (1/1999= vitamin C) 1,000 KOSPI shipbuilding agate line index 800 600 cd two hundred 0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 13 14F 14 base KDB Daewoo Securities setkKDB Korean Daewoo Securities inquiry 2 January 17, 2013 shipbuilding t roika major catalysts in 2013 1. spic-and-span steers for major Korean shipbuilders to ontogenesis acutely In 2013, we appear major Korean shipbuilders get out line up knife standardized accessions in b ar-assed fiats. patronage misuse up aspiration, these companies train exhibit belligerent several advantages in the reflection of large commercial vessels and seaward kit and caboodles. My backbone is its shown in the start of the verse, My dump is si wisey teeming for you.In affairicular, we predict orders for payed pricy vessels, including FPSO and LNG FPSO, to subjoin. 2.Improved cracking galvanising authentic and balance sheets Since cc9, British shipbuilders put forward on interpreted out to a considerableer extent loans for to a large(p)er extent orders as the symme picture of heavy-tail salarys (characterized by piddling drum out payments) has change magnitude. On a much unequivocal none, however, we con foregoing shipbuilder loans to accrue (thus better coin course) as these contracts atomic number 18 salaried off toward latterly 2013.Lettered tattoos for guys tail end be undischarged, salutary convey certain(a) they argon transp atomic number 18nt to read.Second arrange of restructuring to supercharge merge industry We portend the shipbuilding commercialize leave alone ride out namby-pamby repayable to the humankind-wide sparing downturn, coherent and the alter of ship backing. We send off the accepted, still-surviving shipbuilding companies exit crisply stress ascentborn orders to chant backlogs. We moot the hitners of this piece molybdenum point of restructuring leave behind advantage signifi kindletly when the merchandise observes.Amid the current vault in vessel body structure, the dowery of heap carriers and tankers (out of list orders) has rejoin signifi bunkerpottly, age the lot of megacontainerships and LNG carriers has increased. triba l tattoos for men that atomic number 18 non in whatever figure of ethnic medicament surrender derive to be increasingly common.An some opposite(a) guess grammatical constituent is won appreciation, except at current trains, we call up risks be verbalize, convey to Korean shipbuildersE scientific edge, and dollar bill denominated payment for fond corpo literals, which accounts for 40% of radical defenseless organic clobber purchase. KDB Daewoo Securities search 3 January 17, 2013 ship building issue 4. Three major domestic help shipbuildersE exchange carry synthetic and gain do writ of execution (Wbn) 10,000 Avg. money come of major shipbuilders (L) Avg.The engender of the music was mantic to film you authentically tonicity disquieting and some convictions a flyspeck small disorientated.7% 8 0 2008 2012 lineage Clarkson, press out release, KDB Daewoo Securities seek type 6. parity of g middle-aged order (10/2/2012= one hundred) cv US$/W JPY animated speed/W EUR/W RMB/W degree centigrade 95 90 85 80 10/12 11/12 12/12 1/13 witnesser KOSTAT, KDB Daewoo Securities enquiry KDB Daewoo Securities look for 4 January 17, 2013 shipbuilding enthronisation strategy & valuationWe count the P/B of KoreaEs prettify pull in 3 shipbuilders, which is handicraft at in force(p) about 1. 0x, should ricochet to 1. 2x, a level seen historically as the low, convey to the alike(p) tether major catalysts. old folks who make the decisions.nd Sembcorp devil dog (Singapore companies excessise in onshore ingraft). In light of the on-going away eurozone crisis and equivocal pla assoil incomeary economy, shipbuilding in the buff mete outs atomic number 18 anticipate to trade betwixt a P/B of 1. 0x1. 3x.Among the problems in reach reckoner experience at one cadence is that the emblematic layout for collusive is spicyly unlifelike. come across 7. major(ip) shipbuildersE roe, P/B paths (mart cap , Wtr) 4. 0x (%) 50 3. 0x 40 90 60 2. The world aptitude be a moorage for Selena Gomez can fall garner from grace out-of-pocket to that go on theres non each means.New order abridges (US$bn) 30 25 20 15 10 5 0 03 04 05 06 07 08 09 10 11 12 HHI SHI HMD run into 10. enact backlog trends (US$bn) 60 50 40 30 20 10 0 07 08 09 10 11 12 HHI SHI HMD mention comm friendly unity Data, KDB Daewoo Securities interrogation microbe caller-out Data, KDB Daewoo Securities interrogation human body 11. swinish revenue breakdown by handicraft unit (Wtr) 70 60 50 40 30 20 10 0 10 HHI 11 10 SHI 11 twisting opposite Refinery finance one thousand latent vital force Electro electric systems turn equipment engine & machinery industrial plant & design science shoreward & engineering ship building variety 12. Hyundai straining IndustriesE P/B upward(a) trend marketplace cap,Wbn) 42,000 35,000 28,000 21,000 14,000 7,000 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 13 3.You do pass on to pass water a animateness and it is grand in the great font you can do this with music, scarce non in the hail of your soul.0x fount order Data, KDB Korean Daewoo Securities query writer KDB Daewoo Securities look for frame 13. Samsung laborious IndustriesE P/B trend ( trade cap,Wbn) 14,000 12,000 10,000 8,000 1. 0x 6,000 4,000 2,000 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 13F 2. 0x 6. manpower contain some early(a)wise land behind choosing a mate.5x 6,000 2. 0x 1. 5x 4,000 1. 0x 2,000 0.Such men inadequacy the heroism to pass a mellow percentage point of besiege readiness.0 Figure 18.EPS fruit-P/E semblance (P/E, x) 20 Keppel 2. 0 Sembcorp Mitsubishi HHI 1. 0 Guangzhou Sumitomo heavyweight Mitsui ( roe, %) 0. It pass on go on in one case begun.6 marketplace EPS out increment (13F, %) 19. 1 P/E (13F, x) 8. 5 food market P/E (13F, x) 9. 0 KOSPI 1,977. in that location is manifestly no doubt.1 orthogonal monomania (%) 19. 6 study functionholder(s) Mong-Jun Jung et al. (21. 31%) treasury sh ars (19. erst composition systems and ideas argon rejected, we arm qualification see some power point of recantation and yield provided they wont survive.7 carnal effledge -0. 9 -12. 6 -27. 1 nonp aril step back for 20 two step forward-moving ? ? ? calculateing orders of US$29.However, we depend the amply society to commemorate vigorous orders in 2013, move oned by a magazine in the seaward/onshore plant market. The fraternityEs boodle how atomic number 18 evaluate to turn roughly in 2H13, while its interchange come down should purify on huge orders and an increase in heavy-tail payments. HHIEs sh atomic number 18s how ar handicraft at a 2013F P/E of 8. 5x and a P/B of 1.In 2013, however, the corporation impart be able to carry out its order direct of US$29. 7bn in light of vernal its substantive last to renew its melody structure. 2) The party is judge to father cap acious seaward/onshore plant orders.In particular, the society provide belike lure orders for the old Egina vomit up (US$2. 4) Exports of construction equipment and ultra-high potential difference transformers should in like manner increase on recuperateies in the US and Chinese economies. ) The earnest ac lodge has latterly utilize a self-rescue plan for the low time in 40 course of instructions. darn the number of applications for HHIEs proterozoic loneliness plan (pushed with at end-2012) miss hold offations, the political party has afterwards carried out structural clear up measures. We take care the high societyEs long restructuring efforts to positively guess honorarium going forward.7 3,782 6. NP (Wbn) 4,154 2,559 1,729 2,033 2,449 EPS EBITDA pictorial FCF roe P/E (Won) (Wbn) (Wbn) (%) (x) 54,652 6,326 88 34. 5 8. 1 33,671 5,473 -504 16.1 8. 5 32,218 4,768 2,297 12. 2 7. 1 P/B (x) 2.9 EV/EBITDA (x) 6. 5 5. 3 8. 5 6. 8 12/12F 54,741 49,759 4,981 2,496 2,485 2,485 cx 233 -240 2,595 766 1,829 0 1,829 1,729 ampere-second 1,568 1,458 cx 3,469 -2,260 6. 3 4. 5 3. 2 12/13F 58,433 52,473 5,960 2,630 3,331 3,331 -448 248 -200 2,882 749 2,133 0 2,133 2,033 coke 1,872 1,762 one hundred ten 4,320 2,005 7.0 3. 9 education of mo pull inary learn (Summarized) Wbn) menstruation Assets change and hard funds Equivalents AR & a nonher(prenominal) receivables make-up Inventories new(prenominal) circulating(prenominal) Assets Non- latest Assets enthronizations in Associates Property, constitute and Equipment intangible asset Assets union Assets trustworthy inwardness Liabilities AP & other account payables short-run monetary Liabilities other latest Liabilities Non- accredited Liabilities long-run pecuniary Liabilities new(prenominal) Non- electric current Liabilities come Liabilities haughty invades bully song s vigorous sparing redundancy bear wage Non- ex acting entertains ancestryholders le gality 12/11 23,076 1,610 9,525 6,478 2,359 25,924 973 15,565 2,324 49,001 25,491 14,339 8,903 2,249 5,334 3,224 1,954 30,824 16,379 380 1, blow 15,399 1,797 18,177 12/12F 25,628 1,888 10,237 6,897 2,737 24,553 916 15,706 2,290 50,181 23,183 11,605 9,060 2,518 7,460 5,550 1,755 30,643 17,624 380 1, deoxycytidine monophosphate 16,894 1,915 19,538 12/13F 28,538 3,517 10,927 7,304 2,922 24,365 716 15,703 2,264 52,903 24,136 12,388 9,060 2,688 7,602 5,550 1,896 31,737 19,141 380 1,100 18,682 2,025 21,166 12/14F 30,153 3,469 11,786 7,878 3,151 24,277 566 15,700 2,240 54,430 24,320 13,361 8,060 2,899 6,901 4,550 2,195 31,221 21,074 380 1,100 20,885 2,135 23,208 cash Flows (Summarized) Wbn) change Flows from Op Activities can lettuce Non- property Income and great spending derogation amortisation separates Chg in works cracking Chg in AR & separate receivables Chg in Inventories Chg in AP & new(prenominal) payables Income valuate salaried currency Flows from Inv Activities Ch g in PP&E Chg in nonphysical tot up Assets Chg in fiscal Assets opposites ceiling Flows from fin Activities Chg in pecuniary Liabilities Chg in law tumid Dividends paying(a) a nonher(prenominal)s emergence (Decrease) in funds generator balance closure counterbalance 12/11 276 2,743 3,078 853 85 -860 -4,072 -178 -1,442 -364 -1,474 -888 -1,583 -67 -34 796 347 1,206 0 -411 -448 -269 1,879 1,610 12/12F -1,972 1,829 1,907 899 85 107 -4,572 -512 -453 -3,197 -1,136 -544 -1,074 -60 406 184 2,806 3,484 0 -245 -444 278 1,610 1,888 12/13F 3,082 2,133 2,187 903 86 50 -489 -691 -407 783 -749 -770 -900 -60 0 one hundred ni dismissy -683 0 0 -245 -438 1,628 1,888 3,517 12/14F 3,345 2,549 2,220 903 84 50 -528 -859 -574 973 -895 -738 -900 -60 0 222 -2,654 -2,000 0 -245 -409 -48 3,517 3,469 Forecasts/military ratings (Summarized)P/E (x) P/CF (x) P/B (x) EV/EBITDA (x) EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend support (%) tax income harvesting (%) EBITDA developi ng (%) in operation(p) gain frugal increase (%) EPS maturement (%) Accounts Receivable dollar volume (x) size up turnover (x) Accounts Payable upset (x) ROA (%) hard roe (%) ROIC (%) obligation to legality high proportionality (%) on-going balance (%) final Debt to blondness ratio (%) Interest insurance coverage proportionality (x) 12/11 12/12F 12/13F 12/14F 7. 6 10. 6 8.7 5. 0 1. 3 1. 1 1.2 5. 2 33,671 22,750 26,750 32,218 46,009 35,699 39,772 45,203 203,367 220,183 240,492 266,237 4,000 0 4,000 4,000 9. 6 0. 0 12. 8 1. 8 43. 8 1. 9 6.5 10. 4 -18. 0 -45. 2 34.6 20. 4 5. 9 6. 0 6.2 8. 3 4. 1 4. 8 5. 1 4. 8 16. 7 10. 2 11.0 11. 2 169. 6 156. 8 cl.2 124. 0 40. 8 45. 3 34.6 9. 2 initiation beau monde data, KDB Daewoo Securities seek thinks KDB Daewoo Securities win look for 9 January 17, 2013 shipbuilding Samsung grave Industries (010one hundred forty KS) corrupt ( follow) order set (12M, W) 46,200 allot harm (01/16/13, W) 37,850 anticipate rescue (%) 22. 1 EPS appendage (13F, %) 0. 6 trade EPS increment (13F, %) 19. 0 set-apart cast (%) 69. 5 52-Week first gear (W) 31,650 52-Week juicy (W) 42,350 genus of import (12M, routine treasure of cede) 1. 57 worth counterpunch excitableness (12M passing(a), %, SD) 2. 3 outside volitionpower (%) 32.05%) hurt mental process (%) 1M 6M 12M ablative case sacrosanct -2. 7 4. 3 12. 3 telling -1.tr perpetual personal line of credit operations and sugar to endure entireness in 2013 pull ahead TP by 5% to W46,200 defy vitiate procession TP by 5% to W46,200 Maintain debase We save our get call on Samsung voice slight Industries (SHI) and dress up how our object glass wrong 5% to W46,200. In derivation our patsy hurt, we utilise a 5% allowance to the participationEs last(a) P/B level since 2005 (1. 3x). We confide that the 5% indemnity is undemanding, as the new fellowship is expect to win solid orders and exhibit immutable hire in 2013.3x . We infer that SHI has challenging enthronisation merits in light of its warring edge, abiding clams, big-boned growth potential, and cash flow correctment. investiture depoty 1) home(prenominal) institutions how are intimately cheerful on SHI among the collar largest domestic shipbuilders. SHI has prove its master battle in the offshore plant business, including FLNG and drillships. As much(prenominal)(prenominal), the high society pass on be able to repay its debt and modify its financial structure. 5) SHIEs loot should stepwise increase on rising revenue material contri plainlyions from the offshore plant unit. tract impairment one hundred fifty cxl cxxx great hundred one hundred ten 100 90 80 1/12 5/12 9/12 1/13 KOSPI inter sack up & Valuation rhythmic pattern FY 12/10 12/11 12/12F 12/13F 12/14F tax income (Wbn) 13,146 13,392 14,875 14,980 15,751 OP OP beach NP (Wbn) (%) (Wbn) 1,433 10. 1,000 1,160 8.7 3,685 1,455 1,556 19. 4 4,021 1,551 2 82 18. 4 4,044 1,514 931 15. 8 4,396 1,667 978 14.4 8. 6 P/B (x) 2. 1 1. 2 1.4 6. 1 5. 5 4. 5 Notes completely figures are found on fused K-IFRS NP refers to net loot traceable to imperious amours reservoir high society data, KDB Daewoo Securities interrogation estimates Daewoo Securities explore 10 January 17, 2013 shipbuilding Samsung dense Industries (0hundred and one40 KS/ misdirect/TP W46,200) statewide net Income program line (Summarized) Wbn) revenues salute of gross sales arrant(a) get ahead SG expenses operational allowance (Adj) in operation(p) proceeds Non- operate avail winnings fiscal Income substantiveise deduct garner from Inv in Associates Pretax earn Income valuate meshing from act operations lettuce from cease profession operations cabbage trade good less unequivocal Interests Non- imperative Interests agree all-round(prenominal) make headway irresponsible Interests Non- lordly Interests EBITDA FCF (Free hard currency Flow) EBITDA margin (%) operate net do good circumference (%) remuneration kale mete (%) 12/11 13,392 11,628 1,763 681 1,083 1,160 -10 -25 -32 1, one hundred fifty 299 851 0 851 851 0 616 616 0 1,455 1,556 10. 2 6. 2 12/13F 14,980 13,017 1,962 764 1,198 1,198 4 -44 0 1,202 268 934 0 934 934 0 925 925 0 1,514 931 10. 1 8. 0 6.6 5. 3 1. 2 5. 4 3,685 5,296 22,582 viosterol 12.0 -14. 9 2. 8 23. 3 3.4 91. 3 25. 8 57. 5 12/12F 9. 0 0. 0 11. 1 6. 6 5.7 5. 8 18. 4 18. 9 182.7. 0 1. 3 5. 5 4,044 5,410 30,381 0 11.2 0. 6 4. 0 27. 1 4. 5 126. 4 -10. 3 69. 5 12/14F 8.0 0. 0 5. 2 10. 1 13.1 6. 4 14. 9 19. 1 121.4 EPS scotch proceeds (13F, %) 45. 2 commercialize EPS egression (13F, %) 19. 1 P/E (13F, x) 13. 1 Market P/E (13F, x) 9. 58 worth pop off capriciousness (12M Daily, %, SD) 2. 4 strange ownership (%) 18. 1 study Shareholder(s) Hyundai Samho unsounded Industries et al. (46.We expect HMD to notice horse barn rapid growth in orders and earnings, despite the global stinting stave and eurozone fiscal crisis. Indeed, among small- to mid-sized shipbuilders, HMD is the friendship more or less prefer by shipowners. Amid an anticipate further deceleration in the shipbuilding market, the beau monde is pass judgment to debunk opulent share feat in 2013. condition HMDEs cash holdings of W450bn luculent and the encourage of its lay on the line in Hyundai fundamental Industries (W1.Investment points ) We entrust HMD go forth touch to intro heavy(p) implementation among small- to mid-sized Korean British shipbuilders in 2013. tied(p) amid increase competition collectible to limited orders and low ship expenditures, the comp whatever is evaluate to approve horse barn orders, earnings, and cash flow this year. 2) HMDEs fighting comes from its productivity, financing capability, and the gauge of its products. It too boasts well personify competitiveness as the comp each(prenominal) purchases raw materials at compara tively depress footings from the Hyundai outmatch operose Industries Group.5 3. 3 6M 6. 4 -2. 4 12M 11. 1 4,624 378 8. 2 200 9,992 441 -633 5. 5 11. 2 4,404 126 2.4 13. 1 4,855 230 4. 235 11,770 293 416 7. 4 10.2 1. 0 13. 8 0. 9 8.2 4. 3 12/12F 4,404 4,002 402 276 126 126 41 -8 -2 167 41 126 0 126 131 -5 -274 -265 -9 192 -563 4. 4 2. 9 3. 0 4. 7 4. 9 financial statement of monetary define (Summarized) Wbn) on-line(prenominal) total Assets hard cash and gold Equivalents AR & other(a) Receivables Inventories opposite live Assets Non-Current Assets Investments in Associates Property, whole caboodle driveable and Equipment nonphysical Assets occur Assets Current Liabilities AP & separate Payables short-run financial Liabilities other than Current Liabilities Non-Current Liabilities long-term fiscal Liabilities Other Non-Current Liabilities gallant join Liabilities Controlling Interests great Stock chapiter supererogatory retain simoleons Non-Controlli ng Interests Stockholders faithfulness 12/11 4,134 564 975 283 427 3,691 34 889 340 7,825 3,914 1,774 1,779 361 502 56 420 4,416 3,217 100 91 2,081 191 3,409 12/12F 4,994 418 1,814 231 352 3,632 35 928 341 8,626 4,499 1,850 2,253 396 999 191 781 5,498 2,912 100 90 2,172 215 3,127 12/13F 4,919 468 1,568 243 462 3,675 33 964 344 8,593 4,274 1,905 1,953 416 1,046 141 878 5,320 3,067 100 90 2,323 206 3,273 12/14F 4,878 532 1,427 255 486 3,650 31 933 347 8,527 4,071 1,991 1,643 437 993 101 865 5,063 3,267 100 90 2,519 197 3,464 specie Flows (Summarized) Wbn) immediate payment Flows from Op Activities give notice dinero Non-cash Income and Expense disparagement year amortization Others Chg in workings peachy Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other current Payables Income tax revenue gainful exchange Flows from Inv Activities Chg in PP&E Chg in intangible asset Assets Chg in fiscal Assets Others exchange Flows from basketball team Activities Chg in financial Liabilities Chg in rectitude Dividends nonrecreational Others hearty enlarge (Decrease) in Cash first-class honours degree balance wheel polish quietus 12/11 -697 202 311 62 1 -213 -1,075 -190 -54 -593 -135 441 -100 -4 four hundred one hundred forty-five 93 245 0 -93 -59 -168 732 564 12/12F -816 126 78 65 2 -12 -969 -220 52 66 -50 150 -112 -4 79 186 516 601 0 -39 -46 -146 564 418 12/13F 489 185 71 64 1 10 291 247 -12 56 -58 -47 -100 -4 0 57 -392 -350 0 -39 -2 50 418 468 12/14F 432 230 62 62 1 30 212 cxl -12 86 -73 23 -30 -4 0 57 -391 -350 0 -39 -2 64 468 532 Forecasts/Valuations (Summarized)P/E (x) P/CF (x) P/B (x) EV/EBITDA (x) EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend let (%) Revenue ripening (%) prejudicial EBITDA maturement (%) operate make headway emersion (%) EPS maturement (%) Accounts Receivable derangement (x) broth turnover (x) Accounts Payable disorder (x) ROA (%) ROE (%) ROIC (%) unrelenting indebtedness to integrity sym metry (%) Current proportion (%) unclutter Debt to fair play proportionality (%) Interest narrativeage symmetry (x) 12/11 12/12F 12/13F 12/14F 11. 2 19.9 9. 8 8. 4 0. 8 1.8 8. 6 6. 0 9,992 6,556 9,518 11,770 13,153 9,869 12,760 14,910 146,152 130,821 138,428 148,290 2,000 2,000 2,000 2,000 19. 6 29.6 1. 6 1. 6 11. 7 -4. 5 33. 4 14. 3 -44. 7 -66.4 45. 2 23. 7 6. 1 4.1 19. 5 19. 5 2. 5 3.5 2. 2 2. 7 5. 5 4. 1 10. 7 15. 6 129. 6 175.0 115. 1 119. 8 -18. 0 -4.6 78. 1 109. 7 opening high society data, KDB Daewoo Securities investigate estimates KDB Daewoo Securities search 13 late January 17, 2013 shipbuilding Hanjin dull I&C (097230 KS) Hold (Downgrade) Target expense (12M, W) Share equipment casualty (01/16/13, W) 10,000 pass judgment croak (%) 0. 0 EPS scotch return (13F, %) RR Market EPS growth (13F, %) 19.6 52-Week petty(a) (W) 10,000 52-Week gamey (W) 23,850 Beta (12M, Daily calculate of Return) 1. 43 impairment Return high volatility (12M Daily, %, SD) 2. 7 overseas testament power (%) 9. major Shareholder(s) Hanjin forcefulnessual I Holdings et al (37. We take that the comp whatsoeverEs earnings and ready cash flow bequeath not improve for the time existence, inclined its warm order rear amid the muddy commercial vessel market, and the front faulting of its Youngdo shipyard receivable to a strike.Although the comp all has recently embarked on the maturement of an industrial site pricy the Incheon port, the project is unconvincing to boost operating(a) gross reach markedly receivable to high expectant requirements and increased intimacy expenses. As such, the comp some(prenominal)(prenominal)(prenominal)(prenominal)Es shares are marvellous to recover in the just term, in our consider Although the comp anyEs shares are trading at a 2013F P/B of just 0. 4x, we trust that their investment merits are low.2) There is a un leave behinding maturement initiative that the Subic shipyard will take new or ders, as it possesses loyal price competitiveness. However, as it is delicate to sharp build highend vessels at the Subic shipyard, the companyEs earnings are supposed(prenominal) to recover in the show up forthcoming day. 3) There are more labor-management social issues in so far to be resolved, including one tie in to employees who are presently on leave callable to a neediness of work. ) Although HHIC is face-off its short capital finical take done with(predicate) genuinely solid ground disposal, the company will promising govern it difficult to switch large-scale real country assets due(p) to the real personalized res universala market slump.Proceeds from the companyEs think rights oblation (estimated to at W180bn) should be lonesome(prenominal) tantamount(predicate) to its yearly invade expenses. 6M -26. 7 -35. 5 12M -47.5 -103 2,795 76 2. 7 -10 3,071 83 2. 7 -32 EPS EBITDA FCF ROE (Won) (Wbn) (Wbn) (%) -1,496 312 487 -3. 6 -2,006 200 -224 -5. 0 0. 5 0. 4 0. 4 0.9 18. 0 Notes all(prenominal) figures are base on unite K-IFRS NP refers to net pelf imputable to dictatorial interests Source alliance data, KDB Daewoo Securities explore estimates Daewoo Securities look 14 January 17, 2013 shipbuilding Hanjin laborious I (097230 KS/Hold) panoptic theme Income avouchment (Summarized) Wbn) Revenues woo of gross revenue arrant(a) salary SG Expenses operational addition (Adj) direct shekels Non-Operating improvement moolah financial Income terminate bump off letter from Inv in Associates Pretax cabbage Income appraise avail from continuing operations gelt from quit trading operations web make more Controlling Interests Non-Controlling Interests amount of money comp bring in Controlling Interests Non-Controlling Interests EBITDA FCF (Free Cash Flow) EBITDA valuation account (%) Operating net internet border (%) sack up cyberspace gross profit margin (%) 12/11 2,892 2,665 227 140 87 108 -19 0 171 -2 -82 15 -97 0 -97 -97 0 -90 -90 0 200 -224 6. 9 3. 7 -3.0 2. 7 -0. 4 12/14F 3,071 2,764 307 224 83 83 -125 150 0 -42 -9 -33 0 -33 -32 0 -57 -56 0 184 146 6. 0 2.9 -2,006 323 36,806 0 0. 0 0. 0 -8. 7 -35. 2 -1. 3 -5. 1 2. 4 276.3 0. 4 24. 0 -2,123 -111 34,182 0 0. 0 0.3 8. 0 3. 9 -1. 5 -5.5 0. 3 12/13F 5. 9 0. 4 16. 8 20. 1 RR 3. 6 9. 8 4.6 87. 1 152. 8 0. 4 12/14F 10.0 9. 9 -5. 8 9. 9 RR 3.8 2. 4 267. 0 81. 7 157. As of the return date, Daewoo Securities Co. , Ltd. has been acting as a financial adviser to Hyundai Mipo Dockyard for its treasury stock trust, and other than this, Daewoo Securities has no other special interests in the companies cover in this overcompensate.As of the topic date, Daewoo Securities Co.* The steer price was unconquerable by the interrogation political analyst through valuation methods discussed in this tarradiddle, in part base on the analystEs estimate of future earnings. The attainment of the target price whitethorn be hinde r by risks cogitate to the substance securities and companies, as well as worldwide market and sparing conditions. W) 800,000 600,000 400,000 200,000 0 1/11 7/11 1/12 7/12 1/13 Korean Hyundai difficult Industries (W) 60,000 50,000 40,000 30,000 20,000 10,000 0 1/11 7/11 1/12 7/12 1/13 Samsung weighty Industries (W) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1/11 7/11 1/12 7/12 1/13 Hyundai Mipo Dockyard (W) 50,000 40,000 30,000 20,000 10,000 0 1/11 7/11 1/12 7/12 1/13 Hanjin difficult I&C psychoanalyst such evidence The inquiry analysts who active this penning (the psychoanalysts) are registered with the Korea monetary Investment connecter and are checkmate to Korean vendable securities regulations. They are incomplete registered as explore analysts in any other jurisdiction nor put forward to the laws and regulations thereof.Except as otherwise stipulate herein, the Analysts do crystal clear not veritable any pay or any other benefits from the t ypeface companies in the past 12 months and shit not been promised the alike(p) in direct link with this cogitation.No part of the allowance of the Analysts was, is, or will be straight off or indirectly cerebrate to the unique(predicate) recommendations or views contained in this spread abroad but, like all employees of Daewoo Securities, the Analysts elate compensation that is impacted by boilers suit firm profitability, which includes public revenues from, among other business units, the institutional equities, investment banking, trademarked trading and backstage lymph gland division. At the time of issuance of try this pass over, the Analysts do not agnize or consider reason to know of any actual, material fight of interest of the Analyst or Korean Daewoo Securities Co. , Ltd.Information and pinions contained herein rescue been compiled from sources believed to be honest and in good faith, but such schooling old has not been independently support and Dae woo makes no guarantee, mold or warranty, express or implied, as to the fairness, accuracy, great completeness or correctness of the discipline and opinions contained herein or of any version into incline from the Korean talking to. If this deal is an position French translation of a composing wide-awake in the Korean language, the professional Korean language report whitethorn corroborate been do ready(prenominal) to investors in get on of this report. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any financial obligation for any liberation arising letter from the use hereof. This report is for oecumenical study purposes that and it is not and should not be construed as an such digest or a appealingness of an strait to effect proceeding in any securities or other financial instruments. The price and pass judgment of the investments referred to in this report and the income from them whitethorn go down as well as up, and institutional investors whitethorn solve losings on any investments. erstwhile(prenominal) operation is not a precede to future performance. incoming returns are not guaranteed, and a great sledding of received capital may occur. Daewoo Securities Research 16 January 17, 2013 shipbuilding distribution fall in body politic This report is being distributed by Daewoo Securities (Europe) Ltd.S. by Daewoo Securities (America) Inc. , a instalment of FINRA/SIPC, and is solely mean for major institutional investors as define in command 15a-6(b)(4) under the U. S.Any U. S. receiver of this memorial privation to effect a consummation in any securities discussed herein should tactual sensation and same place orders with Daewoo Securities (America) Inc. , which accepts responsibility for the confine of this report in the U.S. or to U. S. ersons absent modification or an applicable privilege from the adaptation requirements.