Korean shipbuilding industry is suggested that it is about time to make a selective investment rather than aggressively increase proportion of yards' shares, although the market is showing a recovery move.
Analyst Lee Jae-Won at Dongyang Securities of Korea said, “In the third quarter of this year, a favorable flow is expected in shipbuilders’ stocks, backed by an expectation from potential rebound seen from shipping market and recovery in drilling rig orders, such as drillship and etc.” and explained, “However, builders’ poor profit will challenge the stocks. Even if newbuilding prices recover, the effect will not be reflected in performance before 2015.”
Accordingly, he advised, “Therefore, although both offshore and merchant vessel markets are under positive circumstances, selective investments must be made with a focus on valuation and order momentum rather than aggressively expansion of yards' shares.”