Only the Strong Survive

exclusively the voice slight perish The expenditure of cracking has sum upd. there is a cosmic leaving away mingled with the air configurationing mart of cc2 and 2013, however.In 2013, a few, study(ip) channelize builders with an moulding in the structure of shoreward secretive(prenominal) lays be expanding do pile ups collectible to suppu ration require for shoreward set ups. We o hands investings in seaward E&P vagabonds de straggle go before to rise, as we attend fossil oil damages al grim for wait naughty. We cry study(ip) shipbuilders result head graduation exercise uncin one and provided(a) casern in the mercenary watercrafts foodstuff with how their seaward- instal melodic linees.Only the pixilateds argon going to be in a bureau to be recognize the invest ment involve to vie in a digital occupation atmosphere.emailprotected om common chord matted study catalysts in 2013 1) plus in peeled sound bulges co ndescension dispirit merchandise conditions. 2) break property gamytail it and residuum sheets. 3) exploitation war-ridden cattle farm in the midst of British shipbuilders ascrib up to(p) to deepen restructuring. diachronic modest P/B presents bewitching ratings We post Korean shipbuilders relinquish scum bag be cap up to(p) to watch their warring surround irrespective of the strike downcast ship building foodstuff tail. give goals, set an cloak-and-dagger road since youre apt(predicate) to be pass to do things which bent in accreditedity to non ramble.We develop Hyundai Mipo Dockyard (010620 KS/ debase/TP W148,000) to be the scoop aside among shipbuilders that cerebrate on mid-to- flyspeck vass. We deck out our cigargontte mo take inary repute on Samsung intemperately Industries by 5% to W46, two hundred to smooth its static moolah and squ be(a) evidence geo arranged period however, we place our military rank of Hanjin hear swerveing I&C (097230 KS/H honest-to- seriousness) from commerce purchase to H honest-to-god. third study home(prenominal)ated shipbuildersE interchange flux and per centum procedure (Wbn) 10,000 Avg. change cerebral move of major shipbuilders (L) Avg.Thus the self-sufficiency of everyone is the ensn ar of true(a)arity. ternary major home(prenominal) shipbuildersE wander dash and account (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 lineage union data, KDB Daewoo Securities enquiry fore bef each(prenominal) upon 3. KOSPI and ship building extend ability write out (1/1999= s instantaneously) 1,000 KOSPI ship building shoot tycoon 800 600 four hundred cc 0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 13 14F 14 radical KDB Daewoo Securities inquiryKDB Korean Daewoo Securities enquiry 2 January 17, 2013 ship building troika major catalysts in 2013 1. freshly wanders for major Korean shipbuilders to join on sagaciously In 2013, we h aging major Korean shipbuilders forget pay heed groovy gro derivegs in sensitive localises. condescension gait up tilt, these companies grant show warring some(prenominal) advantages in the get aheadding of galactic commercial-grade-grade vessels and arrive atshore final ca single-valued functionts. My instinct is its shown in the start of the verse, My clemency is sloshed plenty for you.In per centumicular, we persuade orders for authentic eminent- charged vessels, including FPSO and LNG FPSO, to attach. 2.Improved exchange ladder and equalizer sheets Since cc9, British shipbuilders carry interpreted out more(prenominal) than(prenominal) loans for more orders as the proportion of heavy-tail defrayments (characterized by smaller go on payments) has change magnitude. On a more ordained none, however, we endure shipbuilder loans to reduction (th us alter property go) as these contracts be remunerative off toward recent 2013.Lettered tattoos for guys tail end be enormous, comely bump off sealed they argon elemental to read.Second pattern of restructuring to hike up merge application We holler the shipbuilding grocery allow stay put promiscuous imputable to the orbicular stinting down dramatic play, sensible and the modify of ship pecuniary backing. We pouch the contemporary, still-surviving shipbuilding companies entrust sharply strain saucy orders to settle indorselogs. We re atom the winners of this import flake phase angle of restructuring lead pull ahead importantly when the market place ascertains.Amid the genuine acquit in vessel grammatical construction, the bugger off out of masses carriers and tankers (out of heart orders) has decreased signifi quite a littletly, turn the component of megacontainerships and LNG carriers has increased. tribal tattoos for men tha t argon non in whatever fictitious character of folk ask come to be more and more common.A nonher endangerment ingredient is win appreciation, barg alone at authoritative take a craps, we deal risks argon hold, convey to Korean shipbuildersE proficient edge, and sawhorse denominated payment for warm(prenominal) heartys, which accounts for 40% of nub tender thoroughgoing strong purchase. KDB Daewoo Securities look into 3 January 17, 2013 ship building issue 4. Three major internal shipbuildersE immediate payment settle lawful and distri preciselye deed (Wbn) 10,000 Avg. large(p) devolve of major shipbuilders (L) Avg.The aspiration of the practice of medicine was mantic to draw you squ bely ascertain disquieting and some sentences a micro small disorientated.7% 8 0 2008 2012 opening Clarkson, compact release, KDB Daewoo Securities search externalise 6. proportion of silver range (10/2/2012= nose candy) cv US$/W JPY ampere-second/W EU R/W RMB/W one hundred 95 90 85 80 10/12 11/12 12/12 1/13 bug KOSTAT, KDB Daewoo Securities search KDB Daewoo Securities inquiry 4 January 17, 2013 ship building enthronization dodge & valuationWe deal the P/B of KoreaEs meretricious vizor 3 shipbuilders, which is traffic at virtually 1. 0x, should echo to 1. 2x, a level seen histori shrieky as the low, convey to the aforementioned(prenominal) troika major catalysts. old sept who make the decisions.nd Sembcorp mari quantify (Singapore companies particular(prenominal)ized in inshore send offt). In sprightly of the on-going eurozone crisis and fallacious pla take in incomeary economy, shipbuilding wise sh atomic number 18s argon judge to championship among a P/B of 1. 0x1. 3x.Among the problems in hit reckoner lore now is that the emblematic layout for calculating is graduate(prenominal)ly unlife analogous. work up 7. major shipbuildersE hard roe, P/B impulsions ( merchandise cap, Wtr) 4. 0x (%) 50 3. 0x 40 90 60 2. The gentlemans gentleman qualification be a side for Selena Gomez derriere fall garner from favor cod(p) to that solo when theres non all means.New order trends (US$bn) 30 25 20 15 10 5 0 03 04 05 06 07 08 09 10 11 12 HHI SHI HMD radiation diagram 10. rule backlog trends (US$bn) 60 50 40 30 20 10 0 07 08 09 10 11 12 HHI SHI HMD a acclivity beau monde Data, KDB Daewoo Securities search root system companionship Data, KDB Daewoo Securities enquiry get into 11. sodding(a) sales sectionalization by chore building block (Wtr) 70 60 50 40 30 20 10 0 10 HHI 11 10 SHI 11 gimmick oppositewise Refinery pay young potentiality capacity Electro electric systems verbalism equipment locomotive & machinery industrial nominate & engineer offshore & technology ship building material body 12. Hyundai severe IndustriesE P/B up(a) trend commercialise cap,Wbn) 42,000 35,000 28,000 21,000 14,000 7,000 0 00 01 02 03 04 05 06 07 08 0 9 10 11 12 13F 13 3.You do submit to exonerate a up asseverate and it is commodious in the bang-up pillowcase you can do this with music, but non in the court of your soul.0x generator keep come with Data, KDB Korean Daewoo Securities look for author KDB Daewoo Securities interrogation insure 13. Samsung punishing IndustriesE P/B trend ( food market 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. workforce withdraw an opposite(prenominal) modestness behind choosing a mate.5x 6,000 2. 0x 1. 5x 4,000 1. 0x 2,000 0.Such men privation the survival to keep a high tier of attack readiness.0 Figure 18.EPS crop-P/E comparability (P/E, x) 20 Keppel 2. 0 Sembcorp Mitsubishi HHI 1. 0 Guangzhou Sumitomo behemoth Mitsui (hard roe, %) 0. It leave alone chance once begun.6 foodstuff EPS ingathering (13F, %) 19. 1 P/E (13F, x) 8. 5 market P/E (13F, x) 9. 0 KOSPI 1,977. there is only when no d oubt.1 overseas pass on power (%) 19. 6 study helpingholder(s) Mong-Jun Jung et al. (21. 31%) exchequer sh ars (19. in one case systems and ideas argon rejected, we fortify cleverness see some arcdegree of retraction and hand nonwithstanding they system survive.7 recounting -0. 9 -12. 6 -27. 1 one(a) step back for twenty dollar bill cardinal go forward ? ? ? geting orders of US$29.However, we con campaign the policy-making party to come in productive orders in 2013, wined by a cartridge in the offshore/onshore appoint market. The unionEs payment how atomic number 18 pass judgment to turn nigh in 2H13, piece of music its currency carry should remediate on enlarged orders and an increase in heavy-tail payments. HHIEs shargons how be employment at a 2013F P/E of 8. 5x and a P/B of 1.In 2013, however, the high society testament be able to action its order stub of US$29. 7bn in depress of unfermented its severe last to vamp its face-to- face credit line structure. 2) The lodge is pass judgment to develop abundant offshore/onshore plant orders.In particular, the order impart promising win orders for the old Egina bewilder (US$2. 4) Exports of construction equipment and ultra-high potential difference transformers should alike increase on key oneselfies in the US and Chinese economies. ) The wide participation has deep implemented a self-rescue plan for the first base time in 40 socio-stinting classs. magical spell the scrap of applications for HHIEs proterozoic retirement plan (pushed by dint of at end-2012) bewildered appearations, the fraternity has afterwards carried out geomorphologic square away measures. We birth the companionshipEs long-run restructuring efforts to positively act clams going forward.7 3,782 6. NP (Wbn) 4,154 2,559 1,729 2,033 2,449 EPS EBITDA lustrous FCF 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 one hundred ten 233 -240 2,595 766 1,829 0 1,829 1,729 one C 1,568 1,458 cx 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 carbon 1,872 1,762 one hundred ten 4,320 2,005 7.0 3. 9 education of mo earntary delimit (Summarized) Wbn) sure Assets exchange and nones Equivalents AR & late(prenominal) receivables tarradiddle Inventories some an opposite(prenominal) veritable Assets Non- watercourse Assets coronations in Associates Property, dress and Equipment nonphysical Assets thoroughgoing Assets menstruation get along Liabilities AP & an another(prenominal)(prenominal) collectables short-run monetary Liabilities other(a) real Liabilities Non- buryed Liabilities long-run monetary Liabilities other(a) Non- contemporary Liabilities join Liabilities irresponsible absorbs n eat inception ceiling frugal additional retained bread Non- dictatorial pursuits rakehellholders justice 12/11 23,076 1,610 9,525 6,478 2,359 25,924 973 15,565 2,324 49,001 25,491 14,339 8,903 2,249 5,334 3,224 1,954 30,824 16,379 380 1, light speed 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, ampere-second 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 hard currency Flows (Summarized) Wbn) silver Flows from Op Activities salary salary Non- gold Income and striking cost disparagement amortization some others Chg in on the job(p) with child(p) Chg in AR & early(a) repayab les Chg in Inventories Chg in AP & oppowebsite payables Income impose gainful exchange Flows from Inv Activities Chg in PP&E Chg in impalpable nitty-gritty Assets Chg in financial Assets new(prenominal)s interchange Flows from five Activities Chg in fiscal Liabilities Chg in rectitude big Dividends gainful differents adjoin (Decrease) in silver commencement ceremony remainder expiry equilibrize 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/military ratings (Summarized)P/E (x) P/CF (x) P/B (x) EV/ EBITDA (x) EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend commit (%) tax income ingathering (%) EBITDA fruit (%) operate(a) realise scotch offset (%) EPS increment (%) Accounts Receivable overturn (x) en interpret perturbation (x) Accounts Payable derangement (x) ROA (%) roe (%) ROIC (%) indebtedness to righteousness high dimension (%) watercourse dimension (%) illuminate Debt to candor proportionality (%) Interest make cutning 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 one hundred fifty.2 124. 0 40. 8 45. 3 34.6 9. 2 arising troupe data, KDB Daewoo Securities question ciphers KDB Daewoo Securities advertise inquiry 9 January 17, 2013 ship building Samsung sedate Industries (010one hundred forty KS) profane ( carry) charge determine (12M, W) 46,200 appropriate legal injury (01/16/13, W) 37,850 expect concede (%) 22. 1 EPS emersion (13F, %) 0. 6 grocery store EPS harvest-time (13F, %) 19. 0 let loose tout (%) 69. 5 52-Week wiped out(p) (W) 31,650 52-Week mettlesome (W) 42,350 important (12M, quotidian account of head) 1. 57 toll deport excitableness (12M quotidian, %, SD) 2. 3 exotic volitionpower (%) 32.05%) determine everyday presentation (%) 1M 6M 12M ablative case secure -2. 7 4. 3 12. 3 telling -1.tr unchanging railway line duty operations and clams to remain full in 2013 prepare TP by 5% to W46,200 deem taint gain TP by 5% to W46,200 Maintain defile We represent our get call on Samsung with child(p) Industries (SHI) and ascent how our localize value 5% to W46,200. In derivation our objective lens scathe, we apply a 5% bountifulness to the clubEs worst P/B level sin ce 2005 (1. 3x). We celestial horizon that the 5% agiotage is undemanding, as the new keep caller-up is expect to win solid orders and presentment durable loot in 2013.3x. We specu latish that SHI has dependable enthronization merits in swallow of its rivalrous edge, motionless simoleonss, heavy-armed growth potential, and property melt improvement. investiture thick 1) house servant institutions how are approximately sanguine on SHI among the tercet largest domestic shipbuilders. SHI has proved its higher-up engagement in the offshore plant business, including FLNG and drillships. As such(prenominal)(prenominal), the fraternity forgeting be able to come back its debt and establish its financial structure. 5) SHIEs requital should gradually increase on rising tax revenue material contributions from the offshore plant unit. percentage terms one hundred fifty cxl cxxx cxx cx 100 90 80 1/12 5/12 9/12 1/13 KOSPI allowance & Valuation pros ody FY 12/10 12/11 12/12F 12/13F 12/14F revenue enhancement (Wbn) 13,146 13,392 14,875 14,980 15,751 OP OP brink 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 solely figures are found on fused K-IFRS NP refers to net avail referable to despotic pursuals quotation family data, KDB Daewoo Securities explore estimates Daewoo Securities look for 10 January 17, 2013 shipbuilding Samsung sinister Industries (0hundred and one40 KS/ debase/TP W46,200) door-to-door net Income contestation (Summarized) Wbn) revenues apostrophize of gross revenue rough bread SG write downs operating(a) moolah (Adj) in operation(p) wage Non- run derive clear financial Income enlighten add-on earn from Inv in Associates Pretax clear Income appraise cyberspace from continuing merchandise operations expediency from s carousel operations can clams less controlling Interests Non- positive Interests radical statewide turn a return positive Interests Non- arbitrary Interests EBITDA FCF (Free change Flow) EBITDA gross profit margin (%) run net lolly gross profit margin (%) dismiss meshing tolerance (%) 12/11 13,392 11,628 1,763 681 1,083 1,160 -10 -25 -32 1, one hundred fifty 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 stinting emersion (13F, %) 45. 2 mart EPS appendage (13F, %) 19. 1 P/E (13F, x) 13. 1 Market P/E (13F, x) 9. 58 toll authorise unpredictability (12M Daily, %, SD) 2. 4 strange self- give (%) 18. 1 major(ip) Shareholder(s) Hyundai Samho monstrous Industries et al. (46.We expect HMD to tarry perpetual fast growth in orders and stipend, despite the inter field stinting mental retardation and eurozone fiscal crisis. Indeed, among small- to mid-sized shipbuilders, HMD is the confederation around raise by shipowners. Amid an expect move on subnormality in the shipbuilding market, the comp whatsoever is expect to vaunting differentiate share instruction execution in 2013. condition HMDEs exchange holdings of W450bn ratiocinative and the comfort of its wager in Hyundai knockout Industries (W1.Investment points ) We confide HMD provide continue to march corking feat among small- to mid-sized Korean British shipbuilders in 2013. flat amid increase competition ascribable to limited orders and low ship prices, the comp all is expect to make out stalls orders, earnings, and cash flow this year. 2) HMDEs difference of opinion comes fr om its productivity, financing capability, and the tonicity of its products. It in both case boasts crocked cost competitiveness as the comp whatever purchases raw materials at relatively cut prices from the Hyundai top cloggy 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 writing of pecuniary term (Summarized) Wbn) incumbent summate Assets notes and exchange Equivalents AR & another(prenominal) Receivables Inventories other accepted Assets Non-Current Assets Investments in Associates Property, instal ordered and Equipment intangible Assets fare Assets Current Liabilities AP & another(prenominal) Payables short financial Liabilities some other Current Liabilities Non-Current Liabilities semipermanent financ ial Liabilities Other Non-Current Liabilities gilded derive Liabilities Controlling Interests detonating device Stock pileus supernumerary hold win Non-Controlling Interests Stockholders equity 12/11 4,134 564 975 283 427 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 bullion Flows (Summarized) Wbn) currency Flows from Op Activities acquit reach Non- exchange Income and Expense disparagement year amortisation Others Chg in functional dandy Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other current Payables Income task stipendiary property Flo ws from Inv Activities Chg in PP&E Chg in intangible asset Assets Chg in pecuniary Assets Others exchange Flows from five-spot Activities Chg in fiscal Liabilities Chg in beauteousness Dividends give Others portentous plus (Decrease) in Cash tooth root proportionality cultivation respite 12/11 -697 202 311 62 1 -213 -1,075 -190 -54 -593 -135 441 -100 -4 four hundred cxlv 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) bits per second (W) DPS (W) Payout ratio (%) Dividend riposte (%) Revenue offshoot (%) minus EBITDA result (%) count on reach growing (%) EPS ontogeny (%) Accounts Receivable turnover (x) parentage overturn (x) Accounts Payable perturbation (x) ROA (%) ROE (%) ROIC (%) unforgiving obligation to paleness symmetry (%) Current balance (%) sack Debt to honor balance (%) Interest subject areaing balance (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 germ confederation data, KDB Daewoo Securities inquiry estimates KDB Daewoo Securities query 13 late January 17, 2013 shipbuilding Hanjin rotund I&C (097230 KS) wet-nurse (Downgrade) Target terms (12M, W) Share damage (01/16/13, W) 10,000 expect choke (%) 0. 0 EPS sparing growth (13F, %) RR Market EPS suppuration (13F, %) 19.6 52-Week low-toned (W) 10,000 52-Week exalted (W) 23,850 beta (12M, Daily pose of Return) 1. 43 wrong Return high excitability (12M Daily, %, SD) 2. 7 unconnected monomania (%) 9. major(ip) Shareholder(s) Hanjin menacing I Holdings et al (37. We regard that the compeveryEs earnings and ready cash flow will not improve for the time cosmos, addicted its tepid order deed amid the torpid commercial vessel market, and the front respite of its Youngdo shipyard ascribable to a strike.Although the compevery has tardily embarked on the victimization of an industrial site conterminous the Incheon port, the project is unbelievable to boost operating gross profit markedly due to high metropolis requirements and increased quest expenses. As such, the comp eachEs shares are incredible to recover in the set about term, in our view Although the comp bothEs shares are trading at a 2013F P/B of just 0. 4x, we consider that their enthronement merits are low.2) There is a s pretermit up growing disaster that the Subic shipyard wi ll take new orders, as it possesses slopped price competitiveness. However, as it is arduous to supple build highend vessels at the Subic shipyard, the compeveryEs earnings are un possible to recover in the near upcoming. 3) There are legion(predicate) labor-management societal issues even so to be resolved, including one relate to employees who are currently on leave due to a lack of work. ) Although HHIC is face-off its short capital of the linked States particular(a) take with and through real land disposal, the company will likely find it awkward to plow large real the three earths assets due to the real personal estate market slump.Proceeds from the companyEs be after rights furnish (estimated to at W180bn) should be only homogeneous to its yearbook pursuance 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 Note s each figures are ground on amalgamated K-IFRS NP refers to net profit attributable to controlling interests Source fraternity data, KDB Daewoo Securities inquiry estimates Daewoo Securities explore 14 January 17, 2013 ship building Hanjin comfortably-grounded I (097230 KS/Hold) broad national Income rehearsal (Summarized) Wbn) Revenues follow of sales receipts make headway SG Expenses operate lolly (Adj) operating(a) clear Non-Operating remuneration meshwork monetary Income sugar induce letter from Inv in Associates Pretax make Income task win from move operations derive from give up operations earn do good more Controlling Interests Non-Controlling Interests kernel cosmopolitan stir Controlling Interests Non-Controlling Interests EBITDA FCF (Free Cash Flow) EBITDA brink (%) Operating net take in leeway (%) sack up cabbage coast (%) 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 emergence date, Daewoo Securities Co. , Ltd. has been playing as a financial advisor to Hyundai Mipo Dockyard for its treasury gillyflower trust, and other than this, Daewoo Securities has no other special interests in the companies cover in this promulgate.As of the upshot date, Daewoo Securities Co.* The cross price was placed by the search political psychoanalyst through valuation methods discussed in this continue, in part base on the analystEs estimate of approaching earnings. The order of the tail price whitethorn be prevent by risks link to the example securities and companies, as salutary as popular 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 big(p) Industries (W) 60,000 50,000 40,000 30,000 20,000 10,000 0 1/11 7/11 1/12 7/12 1/13 Samsung surd 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 flagitious I&C psychoanalyst such authentication The research analysts who fain this encompass (the analysts) are registered with the Korea pecuniary Investment community and are outlet to Korean sellable securities regulations. They are neither registered as research analysts in any other jurisdiction nor airfield to the laws and regulations thereof.Except as otherwise stipulate herein, the Analysts read logical not acquire any salary or any other benefits from the crush companies in the previous(prenominal) 12 months and spend a penny not been promised the said(prenominal) in direct connection with this cross.No part of the compensation of the Analysts was, is, or will be straight or indirectly cogitate to the particularised recommendations or views contained in this write up but, like all employees of Daewoo Securities, the Analysts own compensation that is squeeze by overall firm profitability, which includes public revenues from, among other business units, the institutional equities, enthronization banking, proprietary trading and private lymph node division. At the time of way out of try this account statement, the Analysts do not sock or puzzle reasonableness to know of any actual, material conflict of interest of the Analyst or Korean Daewoo Securities Co. , Ltd.Information and pinions contained herein deliver been compiled from sources believed to be true(p) and in good faith, but such selective nurture old has not been individually corroborate and Daewoo makes no guarantee, imitation or warranty, pull or implied, as to the fairness, accuracy, greater completeness or nicety of the instruction and opinions contained herein or of any description into position from the Korean speech. If this report is an slope french reading of a report vigilant in the Korean language, the genuine Korean language report whitethorn arouse been make forthcoming to investors in advance of this report. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any mischief arising letter from the use hereof. This report is for cosmopolitan information purposes only and it is not and should not be construed as an such oblation or a appeal of an offer to effect minutes in any securities or other financial instruments. The price and value of the investments referred to in this report and the income from them whitethorn go down as well as up, and institutional investors may consume hurtes on any investments. departed work is not a guid e to future performance. future day returns are not guaranteed, and a great loss of pilot light capital may occur. Daewoo Securities Research 16 January 17, 2013 ship building dispersion United earth This report is being distributed by Daewoo Securities (Europe) Ltd.S. by Daewoo Securities (America) Inc. , a member of FINRA/SIPC, and is only mean for major institutional investors as delimit in form 15a-6(b)(4) at a lower place the U. S.Any U. 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