PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩5,661 per share · Prices as of the 2026-10-02 close
After swinging from an operating loss in 2022 to a double-digit operating margin in 2025, quarterly profits kept expanding through the first half of 2026, and attention is shifting to the post-peak newbuilding cycle and execution of engine capacity expansion.
In 2025 revenue reached KRW 17.58tn with operating profit of KRW 2.04tn (11.6% margin), a full reversal from the KRW 289bn operating loss of 2022.
The quarterly operating margin rose from 11.4% in 2Q25 to 16.4% in 2Q26, and 2Q26 revenue of KRW 6.33tn with operating profit of KRW 1.04tn is the highest within the period shown.
First-half cumulative orders were USD 14.77bn, of which shipbuilding accounted for USD 12.21bn, up 121.9% year on year (company preliminary disclosure, reported July 2026).
HiMSEN-engine-based US data center power equipment orders grew to a cumulative KRW 1.58tn, with KRW 627bn from AEG in April and KRW 956bn from Corban Energy Group in August.
On the other side, Canada selected Germany's TKMS as preferred bidder for its submarine program, closing off one large naval catalyst, while KEXIM forecast a decline in global newbuilding orders in 2026.
HD Hyundai Heavy Industries is a KOSPI-listed shipbuilder running three divisions - shipbuilding, offshore plant and engine machinery - centered on its Ulsan yard, with intermediate holding company HD Korea Shipbuilding & Offshore Engineering as largest shareholder at a 74.15% stake.
On December 1, 2025 it merged with HD Hyundai Mipo, broadening the vessel spectrum into mid-sized ships (reported via the May 2026 conference call).
Commercial vessels remain the core: of USD 14.77bn in cumulative first-half 2026 orders, shipbuilding took USD 12.21bn, roughly 83% of the company total (as reported in July 2026).
The mix is weighted toward LNG and gas carriers; disclosed first-quarter 2026 revenue mix was 43.9% LNG carriers, 33.5% LPG and ammonia carriers, 15.0% container ships and 6.5% tankers (reported May 2026).
The second pillar, engine machinery, builds two-stroke low-speed engines and the in-house four-stroke medium-speed HiMSEN brand, a business the company describes as global market share leader.
Marine and land-based power HiMSEN units share the same design and production facilities, so entry into the US data center power equipment market in 2026 extended demand beyond the shipbuilding cycle.
The third pillar, offshore plant plus naval and special vessels, is smaller in scale but higher in margin and policy sensitivity; the company cites 108 naval and special ships built and 20 exported since the Ulsan-class frigate program of 1976.
Customers span global shipowners, gas and energy majors, US energy infrastructure developers and navies, while competition is split between Hanwha Ocean and Samsung Heavy Industries at home and Chinese yards plus power-engine players such as Wartsila, Caterpillar and Cummins abroad.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩4.1T | ₩471.5B | 11.4% |
| 2025Q3 | ₩4.4T | ₩557.3B | 12.6% |
| 2025Q4 | ₩5.2T | ₩575B | 11.1% |
| 2026Q1 | ₩5.9T | ₩905.4B | 15.3% |
| 2026Q2 | ₩6.3T | ₩1T | 16.4% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩9T | -₩289.2B | -₩352.1B | −3.2% | −6.7% | 208.1% |
| 2023 | ₩12T | ₩178.6B | ₩24.7B | 1.5% | 0.5% | 229.0% |
| 2024 | ₩14.5T | ₩705.2B | ₩621.5B | 4.9% | 10.9% | 239.9% |
| 2025 | ₩17.6T | ₩2T | ₩1.4T | 11.6% | 15.2% | 180.1% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
The annual trajectory is a clear recovery curve. Revenue rose three years running, from KRW 9.05tn in 2022 to KRW 11.96tn in 2023, KRW 14.49tn in 2024 and KRW 17.58tn in 2025, while the operating line moved from a KRW 289bn loss in 2022 to profits of KRW 179bn in 2023, KRW 705bn in 2024 and KRW 2.04tn in 2025.
The operating margin stepped up from 1.5% in 2023 to 4.9% in 2024 and 11.6% in 2025, and owners' net income flipped from a KRW 352bn loss in 2022 to a KRW 1.42tn profit in 2025. Quarterly data show the trend carrying into 2026.
Revenue climbed for five straight quarters, from KRW 4.15tn in 2Q25 to KRW 4.42tn, KRW 5.19tn, KRW 5.92tn and KRW 6.33tn, while operating profit expanded from KRW 472bn to KRW 1.04tn, lifting the quarterly margin from 11.4% to 16.4%.
Combined first-half 2026 operating profit of KRW 1.95tn approaches the full-year 2025 figure, with owners' net income of KRW 1.60tn over the same six months.
Management and the group cited more working days, productivity gains, a rising share of high-priced vessels in revenue, strong sales of eco-friendly dual-fuel engines and a higher average exchange rate, and described first-quarter 2026 results as containing no one-off items.
That said, the year-on-year growth rates for the first two quarters of 2026 also embed the wider business scope from the December 2025 merger with HD Hyundai Mipo, so organic growth should be read separately.
On the balance sheet, total equity grew from KRW 5.70tn in 2024 to KRW 9.34tn in 2025, cutting the debt-to-equity ratio from 239.9% to 180.1%, while operating cash flow rose from KRW 2.88tn to KRW 3.51tn, keeping profits broadly cash-backed.
The shipbuilding cycle sits at a split point: earnings near a peak zone, new orders in a slowdown zone.
Vessels contracted at prices that rose after 2021 are now in construction and revenue recognition, so Korean yards' profits keep improving, and one tally put the combined backlog of the big three at more than KRW 150tn (reported July 2026).
By contrast, the Export-Import Bank of Korea's overseas economic research institute forecast global newbuilding orders of about 35m CGT in 2026, down roughly 14.6% from 2025, with Korean intake falling 5.3% to around 9m CGT.
Cited drivers were soft shipping markets, US trade friction and owners waiting out a delay of at least one year in amending the International Maritime Organization's Net Zero Framework.
The same report argued the near-term hit is limited because domestic yards hold roughly three years of work and profitability should hold up given the high share of expensive vessel types such as LNG carriers.
In competition, China leads on unit and tonnage share; Clarksons data cited for end-November 2024 put 62% of the global orderbook at Chinese yards versus 20% for Korea.
Korea's big three have answered with selective ordering focused on LNG carriers, very large gas carriers and large container ships rather than volume, and HD Korea Shipbuilding distanced itself from Chinese tanker and bulker volume growth on its first-quarter 2026 call.
A distinguishing feature of this cycle is fresh demand only loosely tied to shipping - AI data center power infrastructure, US Navy maintenance, repair and overhaul plus shipbuilding cooperation, and floating data centers.
The company's published 2026 targets are aggressive. A Hana Securities review of the 2026 new-year briefing put the annual order target at USD 20.42bn and the revenue target at KRW 24.4tn, based on assumptions of KRW 1,350 per dollar and higher steel plate prices.
First-half cumulative orders of USD 14.77bn meant shipbuilding had already covered much of the goal, and on the second-quarter 2026 call HD Korea Shipbuilding said HD Hyundai Heavy Industries had already exceeded its annual target.
Engine machinery booked USD 2.45bn in first-half new orders, or 91.6% of its USD 2.68bn annual target, and in August it signed a KRW 956bn power equipment supply contract with Corban Energy Group based on 9.6MW HiMSEN units totaling 1,000MW, taking cumulative US data center awards to KRW 1.58tn including April's AEG deal (KRW 627bn, 684MW).
A company official said in August 2026 reporting that expansion is genuinely needed and would be phased in line with market and order conditions, while industry assessments noted Ulsan medium-speed engine slots are largely booked through 2030.
In its April 1, 2026 corporate value-up disclosure the company reported 2025 dividends of KRW 567bn and a shareholder return ratio of 40.1%, raised its 2027 revenue target to KRW 25.9tn, and the group said it maintains a policy of returning at least 30% of parent-basis net profit.
In special vessels, an April 2026 contract with the Swedish Maritime Administration for one icebreaker worth about USD 348.9m opened the polar segment, and a USD 5bn fund for US shipbuilding investment was reported.
Conversely, Germany's TKMS was chosen as preferred bidder for Canada's patrol submarine project in July, pushing one large naval export pipeline into future opportunities.
The starting point is that current multiples rest on profits that have already re-rated sharply higher.
Measured against the last four quarters of earnings, the price multiple is not meaningfully comparable to what the same calculation would show on 2023 earnings, when the operating margin was 1.5%, or on the 2022 loss, so multiple stability now hinges on whether profits hold.
Against net assets, by contrast, the shares trade at a premium well above the Korean manufacturing average, reflecting a market that prices backlog and margin improvement rather than book value.
In its April 2026 corporate value-up disclosure the company itself noted its price-to-book ratio had risen over the prior year, the joint result of profit recovery and share price gains.
Dividends have moved to a quarterly framework and the 2025 total rose 205.6% year on year, yet the dividend yield sits below that of high-payout names because growth expectations are capitalized into the price first.
Samsung Securities was reported in July 2026 to forecast revenue of KRW 24.17tn in 2026 and KRW 28.47tn in 2027, with operating profit of KRW 3.69tn and KRW 4.94tn - those are that brokerage's estimates and may differ from reported results.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
Reports indicate that low-priced 2022 vintage work fell to 14% of first-quarter 2026 revenue while post-2023 high-priced work made up 53%. That mix shift is one reason the quarterly operating margin rose from 11.4% in 2Q25 to 16.4% in 2Q26. As remaining high-priced backlog is recognized in sequence, room for further margin improvement remains.
US data center power equipment awards total a cumulative KRW 1.58tn, combining KRW 627bn from AEG in April and KRW 956bn from Corban Energy Group in August.
Kiwoom Securities argued the company is the only domestic player owning medium-speed engine intellectual property, giving it price competitiveness without licensing fees (reported May 2026).
Power-generation engines are demand distinct from vessel ordering, and links to maintenance work at affiliate HD Hyundai Marine Solution are also cited.
The debt-to-equity ratio fell to 180.1% in 2025 after 208.1% in 2022, 229.0% in 2023 and 239.9% in 2024, while operating cash flow grew from KRW 169bn in 2023 to KRW 3.51tn in 2025. KEXIM judged that with roughly three years of work in hand, a short-term order lull would not translate into an immediate blow.
With profits and cash flow improving together, the company sustained quarterly dividends and disclosed a 40.1% shareholder return ratio for 2025.
KEXIM's overseas economic research institute forecast global newbuilding orders of about 35m CGT in 2026, down roughly 14.6%, with order value falling from USD 132bn to USD 112bn. Korean order value was projected to slip from USD 30.5bn in 2025 to USD 28.5bn in 2026.
If weaker ordering feeds into softer newbuilding prices and reduced bargaining power, the high-priced backlog now supporting margins eventually thins.
In July 2026 Canada named Germany's TKMS preferred bidder for its patrol submarine project, and HD Hyundai Heavy Industries, bidding as one team with Hanwha Ocean, lost out.
Analysts quoted by Invest Chosun said the earnings impact is limited because revenue would only have landed after 2030, though bidding costs remain.
Around the same time Hanwha Ocean was reported to have taken the lead on Korea's next-generation destroyer program, leaving the naval growth story dependent on confirmation of follow-on projects.
DS Investment & Securities said engine division utilization has hit a ceiling at 120-140%, making expansion unavoidable if further data center orders come in (reported May 2026).
August 2026 reporting noted Ulsan medium-speed engine slots are largely consumed through 2030 and that the company is weighing a phased expansion plan. With expansion size and timing undecided, continued order accumulation raises delivery management, production allocation and capital spending execution risk.
Analysts flagged that a delay of at least a year in amending the IMO Net Zero Framework raises the chance owners wait rather than accelerate fleet replacement. US trade policy and Sino-US friction are also cited as adding uncertainty to seaborne trade forecasts. Should an order gap persist for years, productivity and workforce management could come under strain.
The company and group explicitly cited a higher average exchange rate among 2026 earnings drivers, and 2026 guidance was described as assuming KRW 1,350 per dollar. Because contracts are dollar-denominated, a reversal in the currency feeds directly into revenue and margins.
Guidance also embeds an assumption of higher steel plate prices, so raw material price direction is another earnings variable.
Largest shareholder HD Korea Shipbuilding holds 74.15%, limiting free float within a multi-layered structure topped by holding company HD Hyundai. Media reports noted that as dividends grow, a large share flows up to the parent and holding company.
With several group affiliates listed simultaneously, shipbuilding and engine momentum is also spread across multiple tickers.
Third-quarter results and conference call. Key items are whether the quarterly operating margin holds near the 16.4% of the second quarter, the pace at which low-priced backlog burns off, divisional margins for shipbuilding and engines, and the quarterly dividend decision.
Whether an engine capacity expansion is approved. The company said it would expand in phases depending on market and order conditions and would disclose any decision, so the scale, capital outlay and start-up timing in any filing are what to watch.
Full-year order tallies and the group's new-year briefing. The final achievement rate against the USD 20.42bn 2026 target plus 2027 order and revenue guidance - especially the weighting of LNG carriers and power-generation engines - will shape next year's revenue visibility.
Whether IMO Net Zero Framework talks resume and the direction of the Clarksons newbuilding price index. Further slippage in the regulatory timetable could also push back replacement ordering for eco-friendly vessels.
Confirmation of full-year 2026 results plus the year-end dividend and value-up plan progress disclosure. Worth checking how the policy of returning at least 30% of parent-basis net profit translates into total dividends, and the gap to the KRW 25.9tn revenue target for 2027.
The direction of HD Hyundai Heavy Industries' last four years is unambiguous.
From an operating loss in 2022 it turned profitable in 2023, then stepped up to a 4.9% operating margin in 2024 and 11.6% in 2025, with revenue and operating profit rising for five straight quarters through the second quarter of 2026 to a 16.4% quarterly margin.
Management attributes the improvement to recognition of high-priced backlog, productivity gains, strong dual-fuel engine sales and currency, while first-half 2026 growth rates also embed the HD Hyundai Mipo merger.
Layered on top is demand only loosely tied to the shipping cycle, such as the cumulative KRW 1.58tn of US data center power equipment awards.
On the other side sit KEXIM's forecast decline in 2026 global ordering and downward pressure on newbuilding prices, the naval pipeline gap left by the Canadian submarine loss, and the execution burden of expanding an engine division already at its utilization ceiling.
Valuation rests jointly on profits that have already re-rated and on a premium to net assets, so multiple stability depends on whether earnings hold or grow from here.
The next checkpoints are therefore margin retention in third-quarter results, any expansion filing, the final annual order tally and 2027 guidance; this report is for information purposes and contains no buy or sell opinion and no target price.
Report written 2026-09-05 · Data as of 2026-09-04
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