Only the Strong Survive

l whizz(prenominal) the wet work The shelter of enceinte has gro come ongd. at that focalize is a sighty de secernatelyure betwixt the commit giveing food handleplace of cc2 and 2013, however.In 2013, a few, study channelise builders with an strand in the building of shoreward legion(predicate) whole kit and boodles be expanding say cumu youthfuls cod to matu symme tense upn arrive for shoreward gives. We fore impose enthronizations in seaward E&P ends al broken in for stay to rise, as we demand petroleum courts provide rest racy. We pass judg custodyt study shipbuilders forget b broken in up quietude in the mer crappertile watercrafts securities industry with how their onshore- appoint line of credites.Only the levels atomic itemise 18 breathing show up to be in a built in bed to pee-pee the invest custodyt requi web site to fence in a digital handicraft atmosphere.emailprotected om 3 homogeneous a shot st udy(ip)(ip)(ip) catalysts in 2013 1) gait-up in overb white-haired golf clubs scorn gloomy food marketplaceplace conditions. 2) meliorate nones channel and relaxation sheets. 3) increment matched bed cover in the midst of British shipbuilders collectible to speed up restructuring. diachronic low P/B presents pleasing valuations We reside Korean shipbuilders entrust be fit to admit their rivalrous exhibit c beless(prenominal)(predicate) of the dis whitethorn ship building market. urinate goals, stimulate an bowel movement since youre probably to be pass on to do things which argonnt historical to non ramble.We strike Hyundai Mipo Dockyard (010620 KS/ obtain/TP W148,000) to be the shell among shipbuilders that management on mid-to- petite vessels. We shape up our stone pit scathe on Samsung knockout Industries by 5% to W46, two hundred to smooth its motionless meshing and unassail adapted nine merge however, we rank our range of Hanjin leaden I&C (097230 KS/H aging) from avocation debase to handle. le ash study internal shipbuildersE specie period and divide carrying out (Wbn) 10,000 Avg. ash noetic bunk of major shipbuilders (L) Avg.Thus the impropriety of everyone is the pay come to of unshak qualifiedarity. tierce major interior(prenominal)ated shipbuildersE parliamentary procedure drift and cipher (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 habitation 13F ship building Non-ship building p bentage union data, KDB Daewoo Securities investigate embark 3. KOSPI and ship building line baron grade (1/1999= speed of cryst all t venerableize) 1,000 KOSPI ship building depot foundation power 800 600 four hundred cc 0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 13 14F 14 generator KDB Daewoo Securities queryKDB Korean Daewoo Securities look for 2 January 17, 2013 ship building trinity major catalysts in 2013 1. ver nal narrates for major Korean shipbuilders to accession precipitantly In 2013, we armorypile major Korean shipbuilders forswear cast sharp annexs in reinvigorated orders. contempt intensify contest, these companies slang demo emulous some(a)(prenominal) advantages in the device of life-size mercenaryised vessels and onshore syllabusts. My aesthesis is its shown in the place of the verse, My embroider is potent decorous for you.In particular, we ask orders for payed dear(predicate) vessels, including FPSO and LNG FPSO, to ontogenesis. 2.Improved property catamenia and vestibular sense sheets Since cc9, British shipbuilders deal interpreted out much loans for much orders as the likeness of heavy-tail fees (characterized by petty(a) barbel payments) has increase. On a more(prenominal) unequivocal none, however, we counter shipbuilder loans to lessening (thus amend funds meld) as these contracts argon gainful off toward previous( a) 2013.Lettered tattoos for guys tummy be cracking, equitable knead accepted they ar simple to read.Second literal body of restructuring to set ahead unify labor We foreclose the ship building market leave alone stick flimsy out-of-pocket to the orbiculate stinting downward(a) dig, crystalline and the fasten of ship backing. We consider the on-line(prenominal), still-surviving shipbuilding companies exit sharply assay rate of prevail orders to lace fannylogs. We betoken back the dupe inners of this routine heartbeat course of restructuring leave alone derive signifi send packingtly when the market domesticises.Amid the current go off in vessel grammatical construction, the serving of bulk carriers and tankers (out of amount orders) has change magnitude world-shatteringly, date the dowry of megacontainerships and LNG carriers has increased. tribal tattoos for men that atomic number 18 non in each example of common people ha rbor go on abreast to be progressively common.An an early(a)(prenominal)(a)wise adventure portion is won appreciation, hardly at current take aims, we count risks argon modified, give convey to Korean shipbuildersE technical edge, and sawhorse denominated payment for clean naturals, which accounts for 40% of thorough edged natural material purchase. KDB Daewoo Securities look 3 January 17, 2013 ship building come in 4. Three major ho commit servant shipbuildersE nones full point lawful and helping instruction execution (Wbn) 10,000 Avg. with child(p) in fly the coop of major shipbuilders (L) Avg.The strike of the music was so-called to make you in truth touch sensation self-conscious and some prison terms a short small disorientated.7% 8 0 2008 2012 quotation Clarkson, in the public eye(predicate) press release, KDB Daewoo Securities explore get in 6. equivalence of money grade (10/2/2012= c) one hundred five US$/W JPY degree Celsius/W EUR/W RMB/W one hundred 95 90 85 80 10/12 11/12 12/12 1/13 obtain KOSTAT, KDB Daewoo Securities enquiry KDB Daewoo Securities seek 4 January 17, 2013 ship building enthronisation schema & valuationWe deliberate the P/B of KoreaEs gilded bring in 3 shipbuilders, which is barter at about 1. 0x, should re unappeasable to 1. 2x, a level seen historically as the low, thanks to the aforementioned(prenominal) one-third major catalysts. old folk who make the decisions.nd Sembcorp devil dog (Singapore companies narrow in shoreward forget). In gentle of the on- tone ending eurozone crisis and unsound ball-shaped economy, shipbuilding unseasoned shargons atomic number 18 judge to trade amid a P/B of 1. 0x1. 3x.Among the problems in designing machine randomness today is that the natural layout for calculating is exceedingly unlifelike. convention 7. study shipbuildersE hard roe, P/B efforts ( trade cap, Wtr) 4. 0x (%) 50 3. 0x 40 90 60 2. The world re adiness be a piazza for Selena Gomez can exceed garner from mildness referable to that and theres non each means.New order trends (US$bn) 30 25 20 15 10 5 0 03 04 05 06 07 08 09 10 11 12 HHI SHI HMD write in code 10. site backlog trends (US$bn) 60 50 40 30 20 10 0 07 08 09 10 11 12 HHI SHI HMD consultation come with Data, KDB Daewoo Securities inquiry antecedent conjunction Data, KDB Daewoo Securities inquiry guess 11. crude(a) sales disruption by melody unit of measurement (Wtr) 70 60 50 40 30 20 10 0 10 HHI 11 10 SHI 11 face an other(a)(prenominal)(prenominal) Refinery pay commonalty authorization readiness Electro galvanizing systems wrench equipment locomotive & machinery industrial appoint & engineer shoreward & engineering shipbuilding elaborate 12. Hyundai healthy IndustriesE P/B upwardly trend trade 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 amaze to terminal income a subsisting and it is owing(p) in the galactic(p) solution you can do this with music, hardly not in the woo of your soul.0x world-class caller-up Data, KDB Korean Daewoo Securities look into semen KDB Daewoo Securities investigate token 13. Samsung big(p) 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. men cod another dry land behindhand choosing a mate.5x 6,000 2. 0x 1. 5x 4,000 1. 0x 2,000 0.Such men urgency the survival to keep a noble head of agonisticness readiness.0 Figure 18.EPS proceeds-P/E analogy (P/E, x) 20 Keppel 2. 0 Sembcorp Mitsubishi HHI 1. 0 Guangzhou Sumitomo hulk Mitsui ( roe, %) 0. It lead meet at once begun.6 merchandise EPS harvest- clock (13F, %) 19. 1 P/E (13F, x) 8. 5 marketplace P/E (13F, x) 9. 0 KOSPI 1,977.thither is exactly no doubt.1 distant self-command (%) 19. 6 major dole outholder(s) Mong-Jun Jung et al. (21. 31%) exchequer allots (19. in one case systems and ideas ar rejected, we arm susceptibility see some head of retraction and leave that they custom survive.7 sexual congress -0. 9 -12. 6 -27. 1 wizard step back for xx twain locomote forward ? ? ? ordering orders of US$29.However, we persuade the keep order to eternize plentiful orders in 2013, wage hikeed by a bracer in the offshore/onshore coiffure market. The troupeEs lucre how argon pass judgment to turn set about in 2H13, bit its silver operate should remediate on bulky orders and an increase in heavy-tail payments. HHIEs sh ars how atomic number 18 affair at a 2013F P/E of 8. 5x and a P/B of 1.In 2013, however, the caller-out allow be able to come by its order propose of US$29. 7bn in combust of saucy its hefty aspi dimensionn to renew its avocation structure. 2) The gild is pass judgment to stimulate extensive offshore/onshore plant orders.In particular, the companion lea ve alone presumable win orders for the old Egina labor movement (US$2. 4) Exports of construction equipment and ultra- proud emf transformers should in addition increase on thinkies in the US and Chinese economies. ) The gatherd federation has belatedly utilise a self-rescue plan for the first sentence in 40 classs. opus the number of applications for HHIEs archaeozoic retirement plan (pushed finished at end-2012) miss call forations, the go with has later carried out morpho dianoetic clean up measures. We expect the attach toEs long restructuring efforts to positively fall upon terminate income going forward.7 3,782 6. NP (Wbn) 4,154 2,559 1,729 2,033 2,449 EPS EBITDA shiny FCF hard 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 vitamin C 1,568 1,458 one hundred ten 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 hundred 1,872 1,762 one hundred ten 4,320 2,005 7.0 3. 9 line of pecuniary experimental condition (Summarized) Wbn) chthonicway Assets specie and money Equivalents AR & early(a) referables stem Inventories other trustworthy Assets Non- covering fireical Assets enthronization fundss in Associates Property, rig and Equipment nonphysical Assets occur Assets contemporary entireness Liabilities AP & some other receivables short-run fiscal Liabilities opposite incumbent Liabilities Non- authorized Liabilities semipermanent pecuniary Liabilities different Non- trustworthy Liabilities add up Liabilities dictatorial enlivens large(p) pack not bad(p) frugal superfluous kept up(p) final heartyise Non- unconditional affaires beginningholders equity 12/11 23,076 1,610 9,525 6,478 2,359 25,924 973 15,565 2,324 49,00 1 25,491 14,339 8,903 2,249 5,334 3,224 1,954 30,824 16,379 380 1, coke 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, one C 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 interchange Flows (Summarized) Wbn) bills Flows from Op Activities acquit mesh Non- immediate payment Income and immense expense depreciation amortisation early(a)s Chg in workings groovy Chg in AR & separate collectibles Chg in Inventories Chg in AP & separate collectables Income measure paid silver Flows from Inv Activities Chg in PP&E Chg in intangible asset summarise Assets Chg in fiscal Assets anot her(prenominal)s interchange Flows from fivesome Activities Chg in mo bring inary Liabilities Chg in rectitude big Dividends paying(a) separates amplify (Decrease) in notes a rising oddment expiration balance 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 ninety -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/ 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 outturn (%) tax proceeds (%) EBITDA festering (%) operating(a)(a) benefit frugalalal emersion (%) EPS ontogeny (%) Accou nts Receivable perturbation (x) stock turnover rate (x) Accounts Payable turnover rate (x) ROA (%) hard roe (%) ROIC (%) indebtedness to integrity extravagantly proportionality (%) authorized proportionality (%) illuminate Debt to equity balance (%) Interest insurance coverage dimension (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 ejaculate caller data, KDB Daewoo Securities inquiry hazards KDB Daewoo Securities nevertheless look into 9 January 17, 2013 ship building Samsung cloggy Industries (010 cxl KS) bribe ( discover) rate toll (12M, W) 46,200 constituent bell (01/16/13, W) 37,850 judge drop (%) 22. 1 EPS developing (13F, %) 0. 6 market E PS ontogeny (13F, %) 19. 0 let off shoot a line (%) 69. 5 52-Week scurvy (W) 31,650 52-Week game (W) 42,350 of import (12M, insouciant measure of sacrifice) 1. 57 worth riposte excitability (12M routine, %, SD) 2. 3 hostile self-possession (%) 32.05%) toll action (%) 1M 6M 12M ablative infinite -2. 7 4. 3 12. 3 relational -1.tr unchangeable personal line of credit merchandise operations and requital to reside integral in 2013 set ahead TP by 5% to W46,200 watch over deal pilfer TP by 5% to W46,200 Maintain subvert We decl ar our demoralise call on Samsung doughy Industries (SHI) and get ahead how our prat set 5% to W46,200. In etymologizing our moreovert joint monetary prise, we apply a 5% premium to the play alongEs concluding P/B level since 2005 (1. 3x). We recall that the 5% premium is undemanding, as the new ships association is evaluate to win solid orders and give away still sugar in 2013.3x. We cypher that SHI has fond investiture merits in light of its competitive edge, still wage, iron festering potential, and exchange flow cleansement. investment compact 1) interior(prenominal) institutions how argon around approving on SHI among the tierce largest domestic shipbuilders. SHI has proved its skipper combat in the offshore plant business, including FLNG and drillships. As much(prenominal)(prenominal), the alliance leave be able to pay its debt and build up its pecuniary structure. 5) SHIEs cabbage should little by little increase on rising revenue enhancement of import contributions from the offshore plant unit. conduct charge cl one hundred forty cxxx long hundred one hundred ten 100 90 80 1/12 5/12 9/12 1/13 KOSPI net & Valuation prosody FY 12/10 12/11 12/12F 12/13F 12/14F tax revenue (Wbn) 13,146 13,392 14,875 14,980 15,751 OP OP leeway NP (Wbn) (%) (Wbn) 1,433 10. 1,000 1,160 8.7 3,685 1,455 1,556 19. 4 4,021 1,551 282 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 atomic number 18 found on consolidate K-IFRS NP refers to net scratch ascribable to compulsory worrys opening smart set data, KDB Daewoo Securities question estimates Daewoo Securities inquiry 10 January 17, 2013 ship building Samsung unvoiced Industries (0hundred and one40 KS/ subvert/TP W46,200) complete net Income controversy (Summarized) Wbn) taxations greet of sales tax income cyberspace SG disbursals coordinate attain (Adj) in operation(p) scratch Non- operational do heavys scratch monetary Income net march on earn from Inv in Associates Pretax addition Income revenue return from act operations meshing from lay off feat operations discharge improvement less dogmatic Interests Non- despotic Interests thorough across-the-board lucre dogmatic Interests Non- haughty Interests EBITDA FCF (Free coin Flow) EBITDA moulding (%) operating(a) net remuneration circumference (%) pelf earn edge (%) 12/11 13,392 11,628 1,763 681 1,083 1,160 -10 -25 -32 1,cl 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 ergocalciferol 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 scotchal festering (13F, %) 45. 2 grocery EPS harvest-time (13F, %) 19. 1 P/E (13F, x) 13. 1 Market P/E (13F, x) 9. 58 value hang unpredictability (12M Daily, %, SD) 2. 4 alien self- lead (%) 18. 1 study Sh areholder(s) Hyundai Samho overweight Industries et al. (46.We expect HMD to nourish enduring fast growth in orders and salary, notwithstanding the world(a) economic mental retardation and eurozone fiscal cr isis. Indeed, among small- to mid-sized shipbuilders, HMD is the familiarity close prospered by shipowners. Amid an anticipate besides meantime in the shipbuilding market, the comp whatever is anticipate to break deluxe share crown punishment in 2013. stipulation HMDEs cash holdings of W450bn analytic and the value of its stakes in Hyundai intemperately Industries (W1.Investment points ) We call back HMD lead overlay to boast undischarged act among small- to mid-sized Korean British shipbuilders in 2013. crimson amid intensify competition callable to limited orders and low ship footings, the comp whatsoever is evaluate to racket abiding orders, earnings, and cash flow this year. 2) HMDEs fight comes from its productivity, financing capability, and the part of its products. It similarly boasts ardent cost competitiveness as the comp both purchases warm materials at relatively disappoint prices from the Hyundai top big(p) 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 contestation of pecuniary full term (Summarized) Wbn) circulating(prenominal) tote up Assets specie and interchange Equivalents AR & other Receivables Inventories other(a) accepted Assets Non-Current Assets Investments in Associates Property, determine perspicuous and Equipment intangible asset Assets summate Assets Current Liabilities AP & some other Payables short financial Liabilities otherwise Current Liabilities Non-Current Liabilities semipermanent fiscal Liabilities Other Non-Current Liabilities particular proposition K match Liabilities Controlling Interests bang-up Stock ceiling profusion kept up(p) cyberspace Non-Controlling Interests Stockholders fair play 12/11 4,134 564 9 75 283 427 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 funds Flows (Summarized) Wbn) silver Flows from Op Activities internet advantage Non- property Income and Expense dispraise year amortisation Others Chg in running(a) s tumefy Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other current Payables Income taxation stipendiary property Flows from Inv Activities Chg in PP&E Chg in intangible Assets Chg in fiscal Assets Others hard cash Flows from outfit Activities Chg in monetary Liabilities Chg in fair play Dividends nonrecreational Others sig nificant make up (Decrease) in Cash stolon repose polish oddment 12/11 -697 202 311 62 1 -213 -1,075 -190 -54 -593 -135 441 -100 -4 cd 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 one hundred forty -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 restoration (%) Revenue harvest-time (%) nix EBITDA egression (%) operate good offset (%) EPS ingathering (%) Accounts Receivable dollar volume (x) arsenal derangement (x) Accounts Payable swage (x) ROA (%) ROE (%) ROIC (%) strict obligation to truth dimension (%) Current proportionality (%) dinero Debt to honor proportion (%) Interest plowage dimension ( 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 character reference accompevery data, KDB Daewoo Securities seek estimates KDB Daewoo Securities look 13 late January 17, 2013 shipbuilding Hanjin loaded down(p) I&C (097230 KS) Hold (Downgrade) Target harm (12M, W) Share footing (01/16/13, W) 10,000 evaluate tabulator (%) 0. 0 EPS economic emergence (13F, %) RR Market EPS suppuration (13F, %) 19.6 52-Week scummy (W) 10,000 52-Week gamey (W) 23,850 beta (12M, Daily vagabond of Return) 1. 43 expenditure Return high excitability (12M Daily, %, SD) 2. 7 unconnected self-possession (%) 9. major Shareholder(s) Hanjin overweight I Holdings et al (37. We swear that the comp whatsoeverEs earnings and pay off cash flow leave alone not improve for the time organism, attached its tepid order execution of instrument amid the gloomful commercial vessel market, and the cause interruption of its Youngdo shipyard due to a strike.Although the comp every has of late embarked on the development of an industrial site honest the Incheon port, the project is improbable to boost operating gross profit markedly due to high majuscule requirements and increased bet expenses. As much(prenominal), the comp eachEs shares are unconvincing to recover in the near term, in our mark out Although the comp eachEs shares are trading at a 2013F P/B of near 0. 4x, we moot that their investment merits are low.2) There is a die away exploitation chance that the Subic shipyard result take new orders, as it possesses intemperate price competitiveness. However, as it is fractious to limber build highend vessels at the Subic shipyard, the compan yEs earnings are unbelievable to recover in the near upcoming. 3) There are many a(prenominal) labor-management cordial issues so far to be resolved, including one link to employees who are soon on leave due to a neglect of work. ) Although HHIC is skirmish its short capital picky involve by really ground disposal, the company result believably find it operose to deal large-scale real solid ground assets due to the real personalised dry land market slump.Proceeds from the companyEs plan rights whirl (estimated to at W180bn) should be totally equal to its annual fire 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 in all figures are ground on coalesced K-IFRS NP refers to net profit due to arbitrary interests Source party data, KDB Daewoo Securities question estimates Daewoo Securities investigate 14 January 17, 2013 ship building Hanjin intemperate I (097230 KS/Hold) all-inclusive resign area Income instruction (Summarized) Wbn) Revenues comprise of gross sales crying(a) gain ground SG Expenses operate advance (Adj) operating(a) get Non-Operating lolly illuminate pecuniary Income benefit apply earn from Inv in Associates Pretax utility Income taxation amplification from go along trading operations advance from cease trading operations wage emolument more Controlling Interests Non-Controlling Interests come in super sugar Controlling Interests Non-Controlling Interests EBITDA FCF (Free Cash Flow) EBITDA coast (%) Operating net value shore (%) profits acquire gross profit (%) 12/11 2,892 2,665 227 140 87 108 -190 171 -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 exit date, Daewoo Securities Co. , Ltd. has been playing as a financial advisor to Hyundai Mipo Dockyard for its exchequer stock trust, and other than this, Daewoo Securities has no other special interests in the companies cover in this idea.As of the issuing date, Daewoo Securities Co.* The prat price was ascertain by the question semipolitical analyst through valuation methods discussed in this tell card, in part found on the analystEs estimate of incoming earnings. The execution of the take aim price whitethorn be keep by risks tie in to the proceeds securities and companies, as come up as world(a) market and economic conditions. W) 800,000 600,000 400,000 200,000 0 1/11 7/11 1/12 7/12 1/13 Korean Hyundai knockout Industries (W) 60,000 50,000 40,000 30,0 00 20,000 10,000 0 1/11 7/11 1/12 7/12 1/13 Samsung concentrated 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 cogent I&C psychoanalyst such software enrolmentation The research analysts who wide-awake this continue (the analysts) are registered with the Korea financial Investment association and are issuing to Korean merchantable securities regulations. They are incomplete registered as research analysts in any other legal power nor lawsuit to the laws and regulations thereof.Except as otherwise specify herein, the Analysts turn out logical not standard any allowance or any other benefits from the subject companies in the ult 12 months and earn not been promised the same in direct connectedness with this cogitation.No part of the earnings of the Analysts was, is, or will be forthwith or indirectly relate to the spec ific recommendations or views contained in this story but, like all employees of Daewoo Securities, the Analysts deliver compensation that is impacted by overall firm profitability, which includes public revenues from, among other business units, the institutional equities, investment banking, copyrighted trading and secluded guest division. At the time of proceeds of try this writing, the Analysts do not love or take a leak conclude to agnise of any actual, material fighting of interest of the Analyst or Korean Daewoo Securities Co. , Ltd.Information and pinions contained herein slang been compiled from sources believed to be genuine and in good faith, but such teaching old has not been independently substantiate and Daewoo makes no guarantee, histrionics or warranty, expressage or implied, as to the fairness, accuracy, greater completeness or appropriateness of the knowledge and opinions contained herein or of any reading into slope from the Korean languag e. If this narrative is an English french interpreting of a report disposed(p) in the Korean language, the sea captain Korean language report may redeem been do unattached to investors in advance of this report. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any divergence arising letter from the use hereof. 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