Daehan Shipbuilding

Daehan Shipbuilding is a specialist in mid-size and near-large vessels, centered on its Haenam yard in Jeollanam-do with a curved-block plant in Yeongam.

Its core products are Suezmax and Aframax crude oil tankers, and brokerage analysis has noted a diversified portfolio spanning Suezmax, Aframax, LR2 product carriers, container ships and shuttle tankers.

Cost competitiveness rests on in-house process integration: a pre-IPO report estimated 100% in-house block fabrication with annual block capacity of 276,000 tons against requirements of about 220,000 tons, leaving room to absorb subcontracting cost increases.

The same report cited Chinese steel plate at 50% of raw materials and foreign workers at 40% of the production workforce as cost-saving factors versus large yards.

On capacity, the company's finance head said in a February 2026 interview that the Haenam yard can build about 12 vessels a year and that acquiring an additional yard could be considered once the balance sheet is solid.

The customer base is concentrated among European and Oceania owners; in September 2025 the company announced six Suezmax tankers worth about KRW 710bn, combining a repeat order from an existing client and a first order from a new client.

In ownership, KHI held 17,771,846 common shares as of an August 7, 2025 filing, or 46.13% of the 38,526,312 shares outstanding. The company listed on the KOSPI market on August 1, 2025.

Competitively, it contests the mid-size tanker space with domestic mid-tier peers such as HJ Shipbuilding & Construction and K Shipbuilding, and with Chinese yards building the same vessel types at scale, while Korea's big three concentrate on higher-value segments.

For 2025 the company posted consolidated revenue of KRW 1,228.1bn, operating profit of KRW 294.1bn and net profit attributable to owners of KRW 248.8bn, an operating margin of 23.9%.

Versus 2024, revenue grew about 14% from KRW 1,075.3bn while operating profit rose roughly 86% from KRW 158.1bn, so margin expansion far outpaced top-line growth. The operating margin widened 9.2 percentage points, from 14.7% in 2024 to 23.9% in 2025.

By quarter, revenue and operating profit were KRW 274.0bn and KRW 66.6bn (24.3%) in 3Q25, KRW 350.4bn and KRW 95.3bn (27.2%) in 4Q25, KRW 308.3bn and KRW 82.6bn (26.8%) in 1Q26, and KRW 354.4bn and KRW 95.2bn (26.9%) in 2Q26, settling margins in the mid-to-high 20s.

Summing the four quarters from 3Q25 through 2Q26 gives about KRW 1,287.1bn of revenue and KRW 339.8bn of operating profit, a margin in the 26% area. Management attributed the trend to productivity gains from repeat construction of core vessel types and management-process improvements.

On earnings quality, operating cash flow of KRW 162.0bn in 2025 was little changed from KRW 158.3bn in 2024, indicating the profit increase did not translate directly into cash inflow.

The balance sheet shifted materially: total liabilities fell from KRW 896.0bn to KRW 445.7bn while equity rose from KRW 453.4bn to KRW 1,092.4bn, cutting the debt-to-equity ratio from 197.6% to 40.8%.

Note also that in 2024 net profit attributable to owners of KRW 172.7bn exceeded operating profit of KRW 158.1bn, implying non-operating contributions, whereas 2025 returned to the more conventional pattern of net profit below operating profit.

Upstream shipbuilding indicators remain elevated. The Clarksons Newbuilding Price Index stood at 186.34 at end-August 2026, up from 185.49 a month earlier and about 28% above the 145.97 level of August 2021. Order allocation by country, however, has tilted heavily toward China.

Clarksons Research data show global orders of 4.20m CGT (125 vessels) in August 2026, of which China took 3.59m CGT (107 vessels, 85%) versus Korea's 0.31m CGT (10 vessels, 7%). Tankers, Daehan's core market, have seen a sharp ordering surge in 2026.

Reports citing Clarksons said more than 150 VLCCs were ordered in the first half of 2026 alone, already exceeding the largest annual total since 1973.

Order backlogs relative to the existing fleet stand at roughly 40% for container, LNG and LPG carriers and 25% for tankers, and the key market question raised is whether 2027-2029 deliveries will match actual tonnage demand.

On structural demand, analysis has put the share of aging vessels at 37% for Suezmax and 54% for Aframax, implying a deep replacement pool.

The regulatory axis is unsettled: adoption of the IMO Net-Zero Framework was deferred by one year at an extraordinary MEPC session in October 2025, with 57 countries in favor of delay and 49 against, and recent renegotiations have centered on whether the original framework can largely survive or will be reshaped through compromise.

Domestically, major Korean yards grew both revenue and operating profit in the first half of 2026 on more deliveries of high-priced, high-value ships and productivity gains, with profits rising faster than revenue.

The order-side facts are clear. The company said cumulative orders reached 17 vessels worth about KRW 2.25tn as of end-July 2026, a record annual intake.

On July 27 it signed for two Suezmax crude carriers with a new European owner, describing the price as high following a record-high vessel price achieved in June, lifting cumulative orders to 17 ships and the backlog to 36 ships (about KRW 4.8tn on a delivery basis).

On annual targets, the company set a 2026 goal of 10-11 vessels worth roughly USD 1bn, with its finance head stating that three years of work is secured and that the 2026 operating margin target is the mid-20% range, similar to 2025.

On mix, management said it delivered roughly one core vessel per month in the first half and would move into full construction of higher-priced ships such as shuttle tankers in the second half.

A November 2025 IBK Securities report estimated that the shuttle tankers under construction are the same size as Suezmax vessels but priced roughly 50% higher. The same report projected steel cutting for container ships, priced above Suezmax tankers, beginning in 2027.

On new businesses, KB Securities said in a June 23, 2026 report that it was also watching progress in new areas such as VLGCs and US Navy vessel MRO, while lowering its 12-month target price to KRW 90,000 from KRW 110,000.

Ordering conditions and input costs remain open variables, leaving newly contracted vessel prices and steel-plate negotiations as the key swing factors for the margin path.