As newbuilding orders for eco-ship kicked into a high gear from this year, shipbuilders’ orderbooks are expected to turn around into an uptrend.
Analyst Choi Won-Kyung at Kiwoom Securities of Korea has said, “The four important factors as yardsticks for stock price in shipbuilding industry are new orders, ship prices, orderbook and earnings result; of four, the most important is said to be orderbook.”
And added “Led by eco-ship, commercial ship market is likely to recover from the latter half of 2013, resulting further orderbook increases of Korea's Big3 builders."
He expected, “The eco-ships delivered from the latter half of 2012 proved their fuel-efficiency.” “Considering time taking to prepare to place orders, it will be the latter half of this year that shipowners, encouraged by the fuel-efficiency, will move forward awarding orders for eco-ships.”
Newbuilding prices of eco-ship are as low as those from 2003, however, fuel-efficiency is said to have improved by 15%-20%. He analyzed, “The attractiveness of eco-ship will increase as time goes by, considering the likely recovery of earnings in the medium to longer term, as European economic crisis gradually is relieved."
Meanwhile, the analyst said that in terms of offshore project segment, it showed quite a postponement due to oil company’s recovery investigation, financial support delays and a shale-gas development boom, etc., however, it is prospected that Final Investment Decisions (FID) will increase at the latter half of this year, considering when production will start.
”Korean builders are expected to win overall $35bn-40bn within this year, thus there is a fat chance that all the three major shipbuilders score more than $10bn, respectively, in the offshore segment,“ he added.