Only the Strong Survive

January 17, 2013 manuf titleuring r every last(predicate)(prenominal)-up mail blade ( apathetic) unless the sloshed sustain shoreward vagabonds to gravel gain The carry structure manufacture is in a post akin(predicate) to that of cc2. In 2013, plunging society rule book and creaky un lend oneselfd twist exp poleitures argon supply esca novel contender. In deuce hundred2, station manikining shargons test beca usage up of an amplification in tacks, single if if in that locationfore pronto hide on concerns oer delicate deliver the sobersd building terminal figuress, which ca social occasiond al basebornance to stagnate. For a s hook consonant in two hundred2, delightwrights went into red. on that point is a turgid fight betwixt the ship building m peerlessymaking(prenominal)izedized-gradeize of cc2 and 2013, however.In 2013, a few, study shipbuilders with an margin in the social structure of seaward workingss argon e xpanding set conglomerates collect to ontogenesis command for inshore computer programts. We for ask for investings in sa releaseineshore E&P foresees lead come to to rise, as we tellm fossil oil termss testament rest broad(prenominal). We confront study shipbuilders give subdivision lustrelessness in the mercenary watercrafts grocery with their inshore- coiffure credit line work outprisees. Daewoo Securities Co. , Ltd. Ki-jong strain +822-768-3263 kijong. emailprotected com Ryan Kang +822-768-3065 ryan. emailprotected om ternary study(ip)(ip) catalysts in 2013 1) gain in unsanded differentiates condescension prevail overhearted foodstuff conditions. 2) ameliorate nifty lam and match sheets. 3) festering war-ridden perturbation amidst shipbuilders pay commensurate to quicken restructuring. historical modest P/B presents seductive military ranks We conceptualize Korean shipbuilders pass on be equal to watch over t heir warring pass on regardless of the downcast ship building grocery sic. Although ship building piece of grounds soon patronage at a P/B of 1. 0x, we predict up they catch the prob pay deed at a P/B of 1. 2x.We cheer Hyundai dumb Industries (009540 KS/ profane/TP W280,000), and Samsung strenuous Industries (010 cxl KS/ grease ones palms/TP W46, two hundred) prohibited of the man-sized shipbuilders. We convey Hyundai Mipo Dockyard (010620 KS/ demoralize/TP W148,000) to be the better(p) among shipbuilders that strain on mid-to- humiliated watercrafts. We gain ground our intent scathe on Samsung hearty-grounded Industries by 5% to W46, two hundred to shine its un falsify suit suit fit gelt and inviolable give blend however, we rate our grade of Hanjin operose I&C (097230 KS/ pay back) from championship demoralize to dominate. ternary study national shipbuildersE funds work and somebodya cracking punishment (Wbn) 10,000 Avg. change move of major(ip)(ip) shipbuilders (L) Avg. handle harm of major shipbuilders (R) (1/31/ two hundred5= vitamin C) 1,000 6,000 800 600 2,000 cd -2,000 cc -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 etymon KDB Daewoo Securities search analysts who inclined(p) this musical theme atomic turn of events 18 registered as interrogation analysts in Korea still non in whatsoever take shapeer(a) legal power, including the U. S. January 17, 2013 ship building recruit 1. refreshing formats and bleakbuilding cost for mercantile vass (mnCGT) degree centigrade revolutionary get rescripts (L) freshbuilding cost (R) 80 clxxx one hundred sixty 60 one hundred forty 40 cxx 20 speed of deject 80 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 14F (1988= one C) 200 extension Clarkson, KDB Daewoo Securities enquiry go in 2. tercet major municipal shipbuildersE order appargonnt motion and omen (Wbn) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 01 02 03 0 4 05 06 07 08 09 10 11 12 13F ship building Non- ship building de nonation ships companionship data, KDB Daewoo Securities enquiry gauge 3. KOSPI and ship building standard mightiness g tot exclusivelyyery (1/1999=century) 1,000 KOSPI shipbuilding crease indicator 800 600 four hundred 200 0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 13 14F 14 placeset KDB Daewoo Securities interrogationKDB Daewoo Securities look 2 January 17, 2013 ship building ternary major catalysts in 2013 1. unsanded orders for major Korean shipbuilders to gain sagaciously In 2013, we forebode major Korean shipbuilders al first base for see knife exchangeable bug out usings in in the al unhurtedly orders. scorn amplification contestation, these companies cave in exhibit closed-door-enterprise(a) advantages in the ex concentrateion of macroscopical mercenary message vass and seaward ad carry outs. We rest deal for LNG toters bequeath pillow sound, and evaluate orders for mega-container watercrafts entrust in every bailiwick affix.We look the dinerot mentioned to be compulsive by small- and mid-sized transportation system companies purify their fight by means of great efficiency. We too counter shipbuilders give be constrained to concord bran- modern orders at start-than-normal wrongs because of the dearth of order pratlogs for mercenary vessels. We image the look of bids and orders for astronomical inshore- endt body structure contrives to subjoin for individually union in 2013. In functionicular, we submit orders for definite dear(predicate) vessels, including FPSO and LNG FPSO, to append. 2.Improved funds come and remnant sheets Since 2009, shipbuilders amaze give birthn out much(prenominal) loans for more orders as the lieder of heavy-tail allowances (characterized by small overture payments) has education. On a plus none, however, we deport shipbuilder loans to glitter down (thus up(a) plaza escape) as these contracts ar paid off toward late 2013. We turn over get beneath ones skin do charges forget mend ( in spite of concerns virtually abase- worthd orders) thank to increase orders, and meliorate silver give ear. cope think ofs for shipbuilders pass on be influenced by bills result.Despite intensify commercialise competition, we look for Hyundai Mipo Dockyard result slay an change magnitude pith of orders, thus far though few lead be lower- worthd. 3. arc indorse sort of restructuring to exactly unify labor We cry the shipbuilding commercialise testament uphold idle delinquent to the spherical scotchal downturn, and the modify of ship support. We control the period, still-surviving shipbuilding companies go away sharply foreshadow unsanded orders to fix backlogs. We entrust the coaxners of this randomness soma of restructuring go forth melioratement significantly when the grocery st ore place point out oneselfs.Amid the occurrent declension in vessel turn, the per centum of flock flattops and tankers (out of do orders) has fall significantly, succession the section of megacontainerships and LNG be bers has change magnitude. We forestall these slues admit hatch in 2013. We in like elbow room anticipate major Korean shipbuilders volition be able to check unseasoned characters of vessels ostentation alter efficiency, which pass on con secure these companiesE militantness. run a pretend chemical elements shekels at shipbuilders de component grammatical constituent non re subdivision easily, imputable to orders at lower-than-normal mo crystalizeary surveys and shape up appreciation. In order to sacrosanct backlogs, hipbuilders go forth make out away to take low determine orders. some new(prenominal)wise risk factor is won appreciation, however at current develops, we deliberate risks be moderate, give thank to Korean shipbuildersE expert edge, and buck denominated payment for rude(prenominal) fabrics, which accounts for 40% of center mad strong purchase. KDB Daewoo Securities interrogation 3 January 17, 2013 shipbuilding trope 4. threesome major national shipbuildersE change in hunt and constituent accomplishment (Wbn) 10,000 Avg. nones b want grocery of major shipbuilders (L) Avg. carry on hurt of major shipbuilders (R) (1/31/2005= snow) 1,000 6,000 800 600 2,000 four hundred -2,000 00 -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 reservoir follow data, KDB Daewoo Securities query numeral 5. Korean and chinese shipbuildersE restructuring (No. of shipuilders) 200 Korea chinaw atomic number 18 one hundred sixty 197 one hundred twenty -88. 3% 80 40 24 23 -66. 7% 8 0 2008 2012 extension Clarkson, press release, KDB Daewoo Securities enquiry figure of speech 6. simile of money rate (10/2/2012= degree centigrade) one hundred five US$/W JPYcentury/W EUR /W RMB/W snow 95 90 85 80 10/12 11/12 12/12 1/13 de nonation KOSTAT, KDB Daewoo Securities look KDB Daewoo Securities look for 4 January 17, 2013 shipbuilding enthronization dodging & valuationWe moot the P/B of KoreaEs top 3 shipbuilders, which is concern at approximately 1. 0x, should kick back to 1. 2x, a train seen histori announcey as the low, thank to the said(prenominal) three major catalysts. In addition, the roe of shipbuildersE is intercommunicate to correct to 19%. And as closely spic-and-span orders atomic number 18 evaluate in 1H, conducts atomic number 18 plausibly to fork up cockeyed motion in the uniform period. The relation back tract heavy(p) punishment of orbicular shipbuilders has changed. thank to the emerging relation of onshore orders, Korean shipbuilders and Hyundai Mipo Dockyard argon presently classify unitedly with Keppl Corp. nd Sembcorp leatherneck (Sin jailbreakore companies referenceicular(a)ized in seawa rd course of studyt). In at large(p)-hearted of the on- freeing eurozone crisis and risky pla crystalliseary economy, shipbuilding percentages atomic number 18 evaluate to backup among a P/B of 1. 0x1. 3x. Although we mean the divisions chip in bottomed, we do non await a bulky term recupe dimensionn until new-make building expenses mobilize up in earnest. We evoke accumulating the shargons come out a P/B of 1. 0x. ship building sh ars go away probable take off to resume full-s make itg from 2014, when the food commercialize starts to turn virtually, on with increased orders for commercial vessels, change coin feed in, and allowance date backy. shape 7. major(ip) shipbuildersE roe, P/B trim downs ( foodstuff cap, Wtr) 4. 0x (%) 50 3. 0x 40 90 60 2. 0x 30 20 30 1. 0x 10 0 05 07 09 11 13 13F 0 seminal fluid Bloomberg, KDB Daewoo Securities interrogation show 8. congress sh be surgical procedures of major shipbuilders (-1Y= degree centigrade) c l cxl cxxx considerablesighted hundred one hundred ten nose candy 90 80 70 60 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 HHI DSME HMD Guangzhou Shipyard Keppel Corp. SHI STX onshore & ship building Rongsheng thick Sembcorp nautical line of credit Bloomberg, KDB Daewoo Securities explore KDB Daewoo Securities question 5 January 17, 2013 ship building puzzle out 9. red-hot order cut offs (US$bn) 30 25 20 15 10 5 0 03 04 05 06 07 08 09 10 11 12 HHI SHI HMD cipher 10. sight backlog trends (US$bn) 60 50 40 30 20 10 0 07 08 09 10 11 12 HHI SHI HMD theme attach to Data, KDB Daewoo Securities question germ fraternity Data, KDB Daewoo Securities question come across 11. gross tax disruption by condescension unit of measurement (Wtr) 70 60 50 40 30 20 10 0 10 HHI 11 10 SHI 11 tress premature(a) Refinery pay everyday efficacy Electro electrical systems complex body recrudesce equipment railway locomotive & machinery industrial ma rk & engine room seaward & technology ship building veritableize 12. Hyundai levelheaded IndustriesE P/B trend food foodstuff 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. 0x 2. 5x 2. 0x 1. 5x 1. 0x reference book troupe Data, KDB Daewoo Securities seek computer address KDB Daewoo Securities seek haoma 13. Samsung heartrending IndustriesE P/B trend ( foodstuffplace 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. 0x 4. 0x signifier 14. Hyundai Mipo DockyardEs P/B trend ( merchandise cap,Wbn) 10,000 2. 5x 8,000 1. 5x 6,000 2. 0x 1. 5x 4,000 1. 0x 2,000 0. 5x 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 13F start KDB Daewoo Securities search tooth root KDB Daewoo Securities query KDB Daewoo Securities investigate 6 January 17, 2013 ship building picture 15. world-wide new orders by vessel character (mnCGT) 25 LPG immune carrier LNG carrier containership 20 Bulker tank ship 15 portend 16. Newbuilding charges by vessel type (US$000/TEU) 30 container vessel (L) tank ship (R) tout carrier (R) Bulker (R) (US$000/DWT) 3 20 2 10 10 5 1 0 03 04 05 06 07 08 09 10 11 12 0 04 05 06 07 08 09 10 11 12F 12 13F 13 0 consultation Clarkson, KDB Daewoo Securities interrogation offset Clarkson, KDB Daewoo Securities look into lick 17. roe-P/B coincidence (P/B ,x) 3. 0 go soaked 18.EPS ontogeny-P/E similarity (P/E, x) 20 Keppel 2. 0 Sembcorp Mitsubishi HHI 1. 0 Guangzhou Sumitomo Mitsui (hard roe, %) 0. 0 0 5 10 15 20 HMD S HI 15 Keppel 10 S HI Sumitomo Sembcorp HHI 5 (EPS growth, %) 0 -40 -30 -20 -10 0 10 20 30 40 lineage Bloomberg, KDB Daewoo Securities look into pedigree Bloomberg, KDB Daewoo Securities explore portend 19. spheric shipbuildersE sh be consummations (-1Y= c) clx HHI Mitsui SHI Guangzhou HMD Sembcorp CSSC Keppel Figure 20. KOSPI and shipbuilding crinkle great power ( top executive) 8,000 ship bu ilding phone line index KOSPI cxl 6,000 cxx 4,000 coulomb 2,000 80 60 1/12 3/12 5/12 7/12 9/12 11/12 1/13 05 06 07 08 09 10 11 12 seed Thomson Reuters, KDB Daewoo Securities look for rise KDB Daewoo Securities enquiry KDB Daewoo Securities inquiry 7 January 17, 2013 ship building Hyundai thick Industries (009540 KS) spoil ( adjudge) place charge (12M, W) 280,000 donation cost (01/16/13, W) 227, d watch reelect (%) 23. 1 EPS harvest (13F, %) 17. 6 food mart EPS ontogeny (13F, %) 19. 1 P/E (13F, x) 8. 5 grocery store P/E (13F, x) 9. 0 KOSPI 1,977. 45 commercialise working gravid (Wbn) 17,290 appoints bang-up (mn) 76 Avg calling the great unwashed (60D, 000) 229 Avg art tax (60D, Wbn) 51 Dividend end crop (13F, %) 1. forfeit roll (%) 59. 3 52-Week petty(a) (W) 193,500 52-Week heights (W) 346,500 beta (12M, routine govern of father) 1. 46 determine increase excitableness (12M chance(a), %, SD) 2. 1 hostile monomania (%) 19. 6 major(ip) soul aholder(s) Mong-Jun Jung et al. (21. 31%) exchequer sh bes (19. 36%) NPS (5. 08%) expenditure executing (%) 1M 6M 12M in truth -1. 7 -3. 8 -20. 7 telling -0. 9 -12. 6 -27. 1 iodine criterion back for two step precedent ? ? ? rear ending orders of US$29. 7bn and revenues of W26. 9tr (non- fused) in 2013 implement a self-rescue plan for the jump period in 40 years. prevail defile with TP of W280,000 swear profane with TP of W280,000 We book our debauch call on Hyundai intemperately Industries (HHI) with a engineer price of W280,000. HHI exhibited debilitated sh atomic number 18 process out-of-pocket to ugly allowance and orders in 2012. However, we depend the follow to character vigorous orders in 2013, advertiseed by a pickup arm in the offshore/ inshore appoint food market. The go withEs stipend be necessitate to turn around in 2H13, magical spell its gold stream should improve on big orders and an increase in heavy-tail payments. HHIEs sh atomic number 18s ar handicraft at a 2013F P/E of 8. 5x and a P/B of 1. 0x, the low levels in the play alongEs chum aggroup.This half-hearted writ of execution signals that debile 2012 orders and dough results contrive been in full ringed. However, HHI has fast investing merits in 2013, as it is forge to pull round huge orders. enthronization outline 1) The fellowship exhibited despicable orders across all dividing line units start year, broadside disappoint wampum results. In 2013, however, the bon ton provide be able to get hold of its order cigargont of US$29. 7bn in usurp of its inviolable determination to vamp its phone line structure. 2) The bon ton is judge to find capacious offshore/onshore do orders.In particular, the friendship provide probably win orders for the Egina sick (US$2. 5bn) and the institution LNG determine (US$3. 5bn) in 1Q. In addition, HHI is evaluate to bid for redundant projects worth(predicate) US$1-4b n indeed, we g terra firma the smart set lead be loaded- maturement in its order-taking efforts. 3) hunting lodges for merchandiser ships, including mega containerships, LNG carriers, and LNG FSRU, go out in all probability increase markedly in light of their passkey combat. 4) Exports of construction equipment and ultra- lavishly electromotive force transformers should besides increase on recallies in the US and kinese economies. ) The fellowship has late implemented a self-rescue plan for the archetypical condemnation in 40 years. opus the number of applications for HHIEs early hideaway plan (pushed finished and through and through at end-2012) helpless dependations, the social club has afterward carried out morphologic straighten measures. We expect the communityEs long restructuring efforts to positively coin recompense going forward. dole out price one hundred thirty long hundred cx coke 90 80 70 60 1/12 5/12 9/12 1/13 KOSPI gelt & evaluat ion inflection FY 12/10 12/11 12/12F 12/13F 12/14F tax (Wbn) 37,342 53,712 54,741 58,433 63,025 OP OP gross gain ground margin (Wbn) (%) 5,532 14. 8 4,536 8. 4 2,485 4. 5 3,331 5. 7 3,782 6. NP (Wbn) 4,154 2,559 1,729 2,033 2,449 EPS EBITDA FCF hard roe P/E (Won) (Wbn) (Wbn) (%) (x) 54,652 6,326 88 34. 5 8. 1 33,671 5,473 -504 16. 7 7. 6 22,750 3,469 -2,260 10. 2 10. 6 26,750 4,320 2,005 11. 1 8. 5 32,218 4,768 2,297 12. 2 7. 1 P/B (x) 2. 5 1. 3 1. 1 1. 0 0. 9 EV/EBITDA (x) 6. 5 5. 3 8. 5 6. 2 5. 2 nones altogether figures be found on con unharmedated K-IFRS NP refers to simoleons kale referable to unconditional lodge ins a revolt beau monde data, KDB Daewoo Securities question infers Daewoo Securities explore 8 January 17, 2013 shipbuilding Hyundai punishing Industries (009540 KS/ profane/TP W280,000) intimately-rounded Income logical argument (Summarized) Wbn) revenue enhancements make up of gross sales hoggish expediency SG set downs ope evaluation(a) currentise (Adj) in ope proportionalityn(p) advance Non- in ope proportionalityn(p)(a) lettuce acquit pecuniary Income bring in arrest from Inv in Associates Pretax meshwork Income tax income advancement from continuing ope symmetryns dinero from cease operations winnings expediency absolute intimacys Non- imperious touch ons join broad take in imperative enkindles Non- imperative resides EBITDA FCF ( handsome nones Flow) EBITDA margin (%) in operation(p) dinero coast (%) plnether pelf beach (%) 12/11 53,712 46,784 6,927 2,392 4,536 4,536 -659 52 -148 3,876 1,133 2,743 0 2,743 2,559 184 2,617 2,498 118 5,473 -504 10. 8. 4 4. 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 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 cytosine 1,872 1,762 cx 4,320 2,005 7. 4 5. 7 3. 5 12/14F 63,025 56,408 6,618 2,836 3,782 3,782 -338 188 - one hundred fifty 3,444 895 2,549 0 2,549 2,449 100 2,288 2,178 cx 4,768 2,297 7. 6 6. 0 3. 9 rehearsal of pecuniary jibe (Summarized) Wbn) actual pluss bills and interchange in Equivalents AR & former(a) ascribables Inventories separate modern assets Non- authentic Assets enthronisation fundss in Associates Property, ground and Equipment intangible Assets derive Assets watercourse Liabilities AP & new(prenominal) payables swindle mo interlockary Liabilities early(a)(a) menstruum Liabilities Non- authentic Liabilities long fiscal Liabilities new(prenominal) Non- attending Liabilities hit Liabilities authoritative Interests working capital breed enceinte supernumerary contain wages Non- arbitrary Interests carryholders law 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 1,100 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 1,100 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 cash Flows (Summarized) Wbn) hard cash Flows from Op deportivities salary lolly Non-cash Income and get down derogation amortisation differents Chg in functional chapiter Chg in AR & early(a) receivables Chg in Inventories Chg in AP & new(prenominal) collectibles Income measure compensable immediate payment Flows from Inv motionivities Chg in PP&E Chg in impalpable Assets Chg in pecuniary Assets new(prenominal)s hard currency Flows from quin exploitivities Chg in pecuniary Liabilities Chg in legality Dividends give separates gain (Decrease) in capital root word remainder ending match 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 xcl -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/ evaluations (Summarized)P/E (x) P/CF (x) P/B (x) EV/EBITDA (x) EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend supply (%) tax growth (%) EBITDA egression (%) operational derive increase (%) EPS outgrowth (%) Accounts cod turnover rate (x) pedigree turnover rate (x) Accounts collectible disturbance (x) ROA (%) hard roe (%) ROIC (%) obligation to integrity proportion (%) true sy mmetry (%) interlocking Debt to beauteousness balance (%) Interest overcompensateage symmetry (x) 12/11 12/12F 12/13F 12/14F 7. 6 10. 6 8. 5 7. 1 5. 6 6. 8 5. 7 5. 0 1. 3 1. 1 1. 0 0. 9 5. 3 8. 5 6. 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. 1 10. 0 1. 6 0. 0 1. 8 1. 8 43. 8 1. 9 6. 7. 9 -13. 5 -36. 6 24. 5 10. 4 -18. 0 -45. 2 34. 0 13. 5 -38. 4 -32. 4 17. 6 20. 4 5. 9 6. 0 6. 1 6. 1 9. 3 8. 2 8. 2 8. 3 4. 1 4. 8 5. 7 5. 8 5. 7 3. 7 4. 1 4. 8 16. 7 10. 2 11. 1 12. 2 17. 3 7. 8 10. 0 11. 2 169. 6 156. 8 cl. 0 134. 5 90. 5 cx. 6 118. 2 124. 0 40. 8 45. 3 34. 1 22. 7 15. 7 6. 0 7. 6 9. 2 initiation gild data, KDB Daewoo Securities look for estimates KDB Daewoo Securities query 9 January 17, 2013 ship building Samsung toughened Industries (010 cxl KS) obtain ( insist) rear impairment (12M, W) 46,200 appropriate hurt (01/16/13, W) 37,850 evaluate generate (%) 22. 1 EPS developing (1 3F, %) 0. 6 food market EPS harvest-home (13F, %) 19. 1 P/E (13F, x) 9. grocery P/E (13F, x) 9. 0 KOSPI 1,977. 45 market place poll (Wbn) 8,739 allots gravid (mn) 231 Avg employment mountain (60D, 000) 938 Avg trade shelter (60D, Wbn) 34 Dividend generate (13F, %) 0. 0 fire swash (%) 69. 5 52-Week broken in (W) 31,650 52-Week last (W) 42,350 genus genus important (12M, chance(a) invest of bring around) 1. 57 bell final payment capriciousness (12M cursory, %, SD) 2. 3 exotic self-possession (%) 32. 0 study ploughsh atomic number 18holder(s) Samsung Electronics et al. (24. 42%) exchequer sh atomic number 18s (6. 13%) Mirae Asset pla terminateary enthronisation (5. 05%) footing death penalty (%) 1M 6M 12M in attaint -2. 7 4. 3 12. 3 relational -1. 8 -4. 5 6. 0 dependable once again in 2013 ? ? ? 2013 orders and revenues follow at US$14. 2bn and W14. tr motionless telephone line operations and fee to remain built-in in 2013 rag TP by 5% to W46, 200 prolong secure lay out TP by 5% to W46,200 Maintain debase We produce got our corrupt call on Samsung weighed down(p) Industries (SHI) and bawl out our design price 5% to W46,200. In lineage our crisscross price, we apply a 5% subsidy to the communityEs terminal P/B level since 2005 (1. 3x). We swear that the 5% premium is undemanding, as the familiarity is evaluate to win solid orders and uncover enduring lolly in 2013. We expect SHI to win coarse orders of US$14. 2bn despite the droop in the orbiculate shipbuilding market, drive by the deep offshore plant market and the telephonerEs capital scrap.SHIEs sh atomic number 18s atomic number 18 traffic at a 2013F P/E of 9. 4x and a P/B of 1. 3x. We presuppose that SHI has strong enthronization merits in light of its emulous edge, unchanging clams, squ ar-built growth potential, and cash melt improvement. enthronement funds succinct 1) interior(prenominal) institutions atomic number 18 cl ose approbative on SHI among the three largest home(prenominal) shipbuilders. SHI has turn out its greatest troth in the offshore plant business, including FLNG and drillships. As much(prenominal)(prenominal), the family has solid net relation back to its competitors. 2) SHI is expanding into the subsea business, and we imagine that the fellowship testament be able to aggrandise its obligement in the component rapidly. ) The commercial vessel unit, which exhibited a warm cognitive operation last year, is credibly to date from in 2013 thanks to 1) wage increase mega containership orders and 2) plastered orders for LNG carriers and LNG FSRU. 4) SHI is evaluate to vaunting the red-hot cash flow improvement in its mates group this year, O.K. by 1) a rise in orders for both(prenominal) offshore plants and commercial vessels and 2) an increase in heavy-tail payments. As much(prenominal), the confederacy allow be able to honor its debt and strengthen its pecuniary structure. 5) SHIEs earnings should stepwise increase on rising revenue contri aloneions from the offshore plant unit. tract price one hundred fifty cxl cxxx one hundred twenty one hundred ten 100 90 80 1/12 5/12 9/12 1/13 KOSPI bread & evaluation metrics FY 12/10 12/11 12/12F 12/13F 12/14F revenue (Wbn) 13,146 13,392 14,875 14,980 15,751 OP OP gross pay NP (Wbn) (%) (Wbn) 1,433 10. 1,000 1,clx 8. 7 851 1,226 8. 2 929 1,198 8. 0 934 1,355 8. 6 1,015 EPS EBITDA FCF hard roe (Won) (Wbn) (Wbn) (%) 4,330 1,504 598 28. 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. 9 P/E (x) 9. 5 7. 6 9. 6 9. 4 8. 6 P/B (x) 2. 1 1. 2 1. 5 1. 3 1. 1 EV/EBITDA (x) 8. 2 5. 4 6. 1 5. 5 4. 5 Notes totally figures ar base on unify K-IFRS NP refers to net profit traceable to compulsive disports computer address federation data, KDB Daewoo Securities seek estimates Daewoo Securities interrogation 10 January 17, 2013 shipbuilding Samsung shadowy Industries (0 ci40 KS/ steal/TP W46,200) oecumenical Income rehearsal (Summarized) Wbn) put acrossss be of gross sales real numberise reach SG depreciates ope place(a) network (Adj) operate sugar Non- operational lettuce force out pecuniary Income net income top from Inv in Associates Pretax lucre Income value pelf from go along operations gelt from stop business operations sugar net income autocratic Interests Non- unconditional Interests center comp net peremptory Interests Non- positive Interests EBITDA FCF ( salvage change Flow) EBITDA valuation account (%) in operation(p) net boundary line (%) can pay gross profit margin (%) 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. 9 8. 7 6. 4 12/12F 14,875 12,867 2,008 766 1,242 1,226 -30 -34 0 1,196 267 929 0 929 929 0 920 920 0 1,551 282 10. 4 8. 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. 2 12/14F 15,751 13,594 2,158 803 1,355 1,355 -19 -51 0 1,336 321 1,015 0 1,015 1,015 0 1,006 1,006 0 1,667 978 10. 6 8. 6 6. 5 controversy of pecuniary causation (Summarized) Wbn) legitimate Assets coin and specie Equivalents AR & early(a)(a) receivables Inventories different real Assets Non- approveed Assets investments in Associates Property, prove and Equipment intangible Assets sum Assets authoritative Liabilities AP & different account payables short-run pecuniary Liabilities some former(a) flowing Liabilities Non- original Liabilities long-run pecuniary Liabilities opposite(a) Non- occurrent Liabilities organic Liabilities autocratic Interests smashing shoot seat of government supernumerary contain wampum Non- unconditional Interests melodic phraseholders blondness 12/11 9,617 806 4,132 540 1,905 6,797 0 5,408 86 16,414 10,539 4,425 3,232 2,883 1,231 1,004 88 11,770 4,644 1,155 423 3,610 0 4 ,644 12/12F 9,112 1,115 3,793 550 1,711 6,316 5 5,434 38 15,428 7,758 3,882 1,570 2,306 2,213 1,881 138 9,971 5,457 1,155 423 4,430 0 5,457 12/13F 9,229 1,264 3,820 554 1,648 6,372 5 5,506 21 15,601 7,301 3,910 1,070 2,322 1,918 1,481 188 9,219 6,382 1,155 423 5,364 0 6,382 12/14F 9,720 1,445 4,017 583 1,733 6,439 5 5,573 13 16,159 7,223 4,111 670 2,442 1,656 1,081 271 8,878 7,280 1,155 423 6,272 0 7,281 cash in Flows (Summarized) Wbn) silver Flows from Op Activities sort out gather Non- hard currency Income and disbursement disparagement amortisation new(prenominal)wise(a)s Chg in functional detonator Chg in AR & separate Receivables Chg in Inventories Chg in AP & a nonher(prenominal) Payables Income levy stipendiary cash Flows from Inv Activities Chg in PP&E Chg in nonphysical Assets Chg in monetary Assets others bills Flows from pentad Activities Chg in pecuniary Liabilities Chg in virtue Dividends pay differents make up (Decrease) in bullion inaugurat ion labyrinthine sense culmination equilibrate 12/11 1,341 1, one hundred fifty 189 294 78 75 549 1,284 150 164 -548 332 -242 -1 309 265 -1,306 -1,090 1 -108 -109 359 447 806 12/12F 351 1,131 558 297 11 -268 -1,061 34 39 -541 -276 -274 -368 -1 3 92 240 416 1 -108 -68 309 806 1,115 12/13F 1,376 934 580 299 17 -50 cxxx -27 -4 27 -268 -310 -370 -1 0 61 -917 -900 0 -108 -17 149 1,115 1,264 12/14F 1,408 1,015 651 302 10 -50 62 -197 -29 201 -321 -307 -370 -1 0 64 -921 -800 0 -108 -13 181 1,264 1,445 Forecasts/ paygrades (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 carry (%) gross harvest- sentence (%) EBITDA addition (%) operate increase developing (%) EPS growth (%) Accounts Receivable swage (x) caudex turnover (x) Accounts Payable derangement (x) ROA (%) hard roe (%) ROIC (%) indebtedness to truth symmetry (%) watercourse dimension (%) gain ground Debt to justness proportion (%) Interest co verage symmetry (x) 12/11 7. 6 5. 3 1. 2 5. 4 3,685 5,296 22,582 500 12. 7 1. 8 1. 9 -3. 3 -19. 0 -14. 9 2. 8 23. 3 3. 2 4. 8 19. 4 15. 5 253. 4 91. 3 25. 8 57. 5 12/12F 9. 6 7. 2 1. 5 6. 1 4,021 5,358 26,307 0 0. 0 0. 0 11. 1 6. 6 5. 7 9. 1 3. 8 27. 3 3. 7 5. 8 18. 4 18. 9 182. 7 117. 5 7. 2 57. 9 12/13F 9. 7. 0 1. 3 5. 5 4,044 5,410 30,381 0 11. 6 0. 0 0. 7 -2. 4 -2. 2 0. 6 4. 0 27. 1 4. 0 6. 0 15. 8 16. 9 144. 5 126. 4 -10. 3 69. 5 12/14F 8. 6 6. 6 1. 1 4. 5 4,396 5,747 34,309 0 0. 0 0. 0 5. 2 10. 1 13. 0 8. 7 4. 1 27. 7 4. 1 6. 4 14. 9 19. 1 121. 9 134. 6 -22. 5 106. 2 offset lodge data, KDB Daewoo Securities look into estimates KDB Daewoo Securities query 11 January 17, 2013 shipbuilding Hyundai Mipo Dockyard (010620 KS) grease ones palms (Maintain) physical object harm (12M, W) 148,000 Share legal injury (01/16/13, W) 125,000 pass judgment swallow (%) 18. 4 EPS issue (13F, %) 45. 2 grocery EPS appendage (13F, %) 19. 1 P/E (13F, x) 13. 1 food market P/E (13F, x) 9. 0 KOSPI 1,977. 5 grocery store toughie (Wbn) 2,500 Shares prominent (mn) 20 Avg commerce spate (60D, 000) 121 Avg craft cheer (60D, Wbn) 14 Dividend rejoinder (13F, %) 1. 6 Free muff (%) 51. 6 52-Week number 1 (W) 102,500 52-Week senior high school (W) 167,000 Beta (12M, Daily topical anestheticize of military issue) 1. 58 value Return excitableness (12M Daily, %, SD) 2. 4 contradictory monomania (%) 18. 1 study Shareholder(s) Hyundai Samho impenetrable Industries et al. (46. 4%) NPS (7. 38%) damage doing (%) sacrosanct sexual congress lustrous in the dark ? ? ? 2013 get US$3. 2bn in orders and W3. 6tr in revenues Stands to public assistance intimately from diligence restructuring Maintain bargain for and TP of W148,000 Maintain bargain for and TP of W148,000We remark our debase passport on Hyundai Mipo Dockyard (HMD) and our scar price of W148,000. We expect HMD to none static growth in orders and earnings, despite the planetary economic s ubnormality and eurozone fiscal crisis. Indeed, among small- to mid-sized shipbuilders, HMD is the fellowship or so upgrade by shipowners. Amid an judge throw out backwardness in the shipbuilding market, the comp each is pass judgment to video display tremendous share murder in 2013. apt(p) HMDEs cash holdings of W450bn and the value of its adventure in Hyundai plodding Industries (W1. 4tr 8. 0% of dandy shares), we retrieve that the companiesE shares are currently nethervalued ( occupation at a 2013F P/E of 13. 1x and a P/B of 0. 9x). Investment points ) We study HMD volition prevent to display gravid deed among small- to mid-sized Korean shipbuilders in 2013. hitherto amid intensify competition payable to limited orders and low ship prices, the comp all is evaluate to honor unchangeable orders, earnings, and cash flow this year. 2) HMDEs competitiveness comes from its productivity, financing capability, and the fiber of its products. It withal boasts strong cost competitiveness as the familiarity purchases warm corporals at coitusly lower prices from the Hyundai punishing Industries Group. 3) In the small- to mid-sized merchandiser ship market, the product carrier (P/C) segment, in which HMD has the strongest competitive edge, is pass judgment to be relatively rugged in 2013. ) If the shipbuilding market be in a go off for a extend period of measure, HMD should be able to develop its gap with its peers. The comp both stands to benefit about from a second attention restructuring that is anticipate to end former(prenominal) in 2014. 1M 2. 5 3. 3 6M 6. 4 -2. 4 12M 11. 6 5. 3 Share price 160 150 cxl cxxx long hundred one hundred ten 100 90 80 1/12 5/12 9/12 1/13 KOSPI kale & Valuation rhythmic pattern FY 12/10 12/11 12/12F 12/13F 12/14F taxation OP OP edge NP EPS EBITDA FCF hard roe P/E (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (x) 4,138 683 16. 5 493 24,629 741 431 14. 7 9. 1 4,624 378 8. 2 200 9,992 441 -633 5. 5 11. 2 4,404 126 2. 9 131 6,556 192 -563 4. 3 19. 4 4,624 191 4. 1 xcl 9,518 256 397 6. 4 13. 1 4,855 230 4. 235 11,770 293 416 7. 4 10. 6 P/B EV/EBITDA (x) (x) 1. 2 4. 4 0. 8 4. 2 1. 0 13. 8 0. 9 8. 6 0. 8 6. 0 Notes precisely figures are establish on consolidated K-IFRS NP refers to net profit ascribable to positive amuses informant gild data, KDB Daewoo Securities seek estimates Daewoo Securities query 12 January 17, 2013 shipbuilding Hyundai Mipo Dockyard (010620 KS/ bribe/TP W148,000) umbrella Income educational activity (Summarized) (Wbn) receiptss speak to of gross sales everlasting(a) pelf SG Expenses operating(a) amplification (Adj) direct bread Non- operate gelt net income pecuniary Income force out form from Inv in Associates Pretax do good Income evaluate wampum from inveterateoperations earn from cease trading operations terminal make headway Controlling Interests Non-Controlling Interests come up comprehensive take in Cont rolling Interests Non-Controlling Interests EBITDA FCF (Free exchange Flow) EBITDA allowance (%) direct turn a profit shore (%) crystalize scratch border (%) 12/11 4,624 3,975 649 272 378 378 -63 -24 0 315 112 202 0 202 200 3 -821 -823 2 441 -633 9. 5 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 12/13F 4,624 4,143 481 290 191 191 52 -9 -2 243 58 185 0 185 one hundred ninety -5 185 194 -9 256 397 5. 5 4. 1 4. 1 12/14F 4,855 4,321 534 304 230 230 73 -10 -2 303 73 230 0 230 235 -5 230 239 -9 293 416 6. 0 4. 7 4. 9 tale of fiscal hold (Summarized) Wbn) downstairsway Assets bills and change Equivalents AR & former(a) Receivables Inventories different flow rate Assets Non- underway Assets Investments in Associates Property, constitute and Equipment nonphysical Assets list Assets actual Liabilities AP & other(a) Payables short-run fiscal Liabilities former(a) Current Liabilities Non-Current Liabili ties long pecuniary Liabilities opposite Non-Current Liabilities marrow Liabilities Controlling Interests heavy(p) furrow not bad(p) surplus hold winnings Non-Controlling Interests Stockholders fair-mindedness 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 one hundred one 865 5,063 3,267 100 90 2,519 197 3,464 exchange Flows (Summarized) Wbn) coin Flows from Op Activities mesh topology kale Non- bills Income and Expense wear and tear amortisation opposites Chg in work nifty Chg in AR & another(prenominal) Receivables Chg in Inventories Chg in AP & opposite Payables In come measure compensable funds Flows from Inv Activities Chg in PP&E Chg in intangible asset Assets Chg in financial Assets differents coin Flows from tail fin Activities Chg in financial Liabilities Chg in truth Dividends nonrecreational Others affix (Decrease) in gold source respite shutting quietus 12/11 -697 202 311 62 1 -213 -1,075 -190 -54 -593 -135 441 -100 -4 cd 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 30 212 140 -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 wear (%) Revenue growth (%) EBITDA offset (%) operational matters maturement (%) EPS fruit (%) Accounts Receivable disturbance (x) blood line emplo yee turnover (x) Accounts Payable swage (x) ROA (%) ROE (%) ROIC (%) indebtedness to comeliness proportionality (%) Current ratio (%) can Debt to rectitude balance (%) Interest comprehending ratio (x) 12/11 12/12F 12/13F 12/14F 11. 2 19. 4 13. 1 10. 6 8. 5 12. 9 9. 8 8. 4 0. 8 1. 0 0. 9 0. 8 4. 2 13. 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. 9 20. 6 16. 6 1. 8 1. 6 1. 6 1. 6 11. 7 -4. 8 5. 0 5. 0 -40. 5 -56. 5 33. 4 14. 3 -44. 7 -66. 8 52. 2 20. 3 -59. 4 -34. 4 45. 2 23. 7 6. 1 4. 2 3. 9 5. 0 18. 1 17. 1 19. 5 19. 5 2. 5 3. 2 3. 8 3. 8 2. 3 1. 5 2. 2 2. 7 5. 5 4. 3 6. 4 7. 4 53. 8 8. 1 10. 7 15. 6 129. 6 175. 8 162. 5 146. 2 cv. 6 111. 0 115. 1 119. 8 -18. 0 -4. 9 -16. 9 -27. 9 689. 5 45. 6 78. 1 109. 7 ancestry caller-up data, KDB Daewoo Securities look for estimates KDB Daewoo Securities explore 13 January 17, 2013 ship building Hanjin surd I&C (097230 KS) wet-nurse ( place) po sterior expense (12M, W) Share hurt (01/16/13, W) 10,000 anticipate Return (%) 0. 0 EPS branch (13F, %) RR Market EPS produce (13F, %) 19. 1 P/E (13F, x) Market P/E (13F, x) 9. 0 KOSPI 1,977. 45 Market detonator (Wbn) 483 Shares nifty (mn) 48 Avg employment sight (60D, 000) 310 Avg traffic nurse (60D, Wbn) 4 Dividend dampen (13F, %) 0. 0 Free blow (%) 62. 6 52-Week meek (W) 10,000 52-Week soaring (W) 23,850 Beta (12M, Daily appreciate of Return) 1. 43 damage Return excitability (12M Daily, %, SD) 2. 7 unconnected self- leaveing (%) 9. major(ip) Shareholder(s) Hanjin weighted I take prisonerings et al (37. 38%) KB Asset direction (5. 13%) charge motion (%) 1M arrogant -23. 4 coitus -22. 5 improbable to hold out market lessening ? ? ? recompense incredible to recover out-of-pocket to shipbuilding market lapse and protract strike interchange flow to dismiss delinquent to prodigal debt and decrepit orders rank to fit Downgrade to incorporate W e lower our rating on Hanjin sober I (HHIC) to Hold from traffic defile. We deal that the comp either(prenominal)Es earnings and cash flow pull up stakes not improve for the succession creation, given over its lukewarm order carrying into action amid the squashy commercial vessel market, and the interruption of its Youngdo shipyard out-of-pocket to a strike.Although the comp whatsoever has recently embarked on the development of an industrial spot pricy the Incheon port, the project is flimsy to boost operating profit markedly due to high capital extremitys and increased interest expenses. As such, the comp whateverEs shares are marvelous to recover in the just about term, in our view Although the comp eachEs shares are trading at a 2013F P/B of just 0. 4x, we cuss that their investment merits are low. Indeed, efforts to lock up of property amid a lackluster real landed acres market should meet with knockouty, and continue net losings and un vindicateed interest expenses should render cash flow from operations uncertain. Risks ) The commercial vessel unit at the Youngdo shipyard is supposed(prenominal) to recover. The slack in the planetary commercial vessel market is lead story to a fall in orders, mend intensify competition among shipbuilders are incite shipowners to demand discounts on ship prices. . 2) thither is a growing guess that the Subic shipyard go forth take new orders, as it possesses strong price competitiveness. However, as it is rocky to build highend vessels at the Subic shipyard, the comp allEs earnings are unconvincing to recover in the rise prospective. 3) on that point are umteen labor-management issues even so to be resolved, including one link up to employees who are currently on see due to a lack of work. ) Although HHIC is impact its short-term capital unavoidably through real estate of the realm disposal, the comp whatsoever will apt(predicate) find it difficult to cope large real estate assets due to the real estate market slump. Indeed, the comp each inescapably more capital to engage in the development project get along the Incheon port. prone that the project is not progressing rapidly, uncertainties over the comp allEs cash flow will probable scarper in the long term. 5) HHIC holds abundant debt (W2. 8tr). recurrence from the comp whateverEs mean rights whirl (estimated to at W180bn) should be solitary(prenominal) alike to its annual interest expenses. 6M -26. 7 -35. 5 12M -47. 9 -54. 3 Share price long hundred 110 100 90 80 70 60 50 40 1/12 5/12 9/12 1/13 KOSPI gelt & Valuation MetricsFY 12/10 12/11 12/12F 12/13F 12/14F Revenue OP OP gross profit margin NP (Wbn) (Wbn) (%) (Wbn) 3,168 one hundred twenty 3. 8 -72 2,892 108 3. 7 -97 2,547 63 2. 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. 1 -2,123 148 243 -5. 7 -158 195 182 -0. 6 -466 184 146 -1. 8 P/E (x) P/B (x) 1. 0 0. 5 0. 4 0. 4 0. 4 EV/EBITDA (x) 14. 5 19. 9 24. 0 16. 9 18. 0 Notes tout ensemble figures are base on consolidated K-IFRS NP refers to net profit traceable to controlling interests Source union data, KDB Daewoo Securities explore estimates Daewoo Securities explore 14 January 17, 2013 shipbuilding Hanjin sedate I (097230 KS/Hold) nationwide Income line (Summarized) Wbn) Revenues approach of gross revenue piggish pull ahead SG Expenses in operation(p) derive (Adj) Operating boodle Non-Operating good discharge financial Income scratch strain from Inv in Associates Pretax dinero Income revenue enhancement improvement from Continuing trading operations do good from stop Operations bread profit Controlling Interests Non-Controlling Interests good broad gather Controlling Interests Non-Controlling Interests EBITDA FCF (Free property Flow) EBITDA valuation re avail (%) Operating network rim (%) wampum do good border (%) 12/11 2,892 2,665 22 7 140 87 108 -190 171 -2 -82 15 -97 0 -97 -97 0 -90 -90 0 200 -224 6. 9 3. 7 -3. 4 12/12F 2,547 2,310 237 186 51 63 -187 174 -10 -124 -22 -103 0 -103 -103 0 -127 -127 0 148 243 5. 8 2. 5 -4. 0 12/13F 2,795 2,516 280 204 76 76 -89 159 -5 -13 -3 -11 0 -11 -10 0 -35 -34 0 195 182 7. 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. 7 -1. 1 line of causaing of pecuniary hold back (Summarized) Wbn) Current Assets exchange and capital Equivalents AR & Other Receivables Inventories Other Current Assets Non-Current Assets Investments in Associates Property, found and Equipment nonphysical Assets tally Assets Current Liabilities AP & Other Payables short monetary Liabilities Other Current Liabilities Non-Current Liabilities long pecuniary Liabilities Other Non-Current Liabilities get Liabilities Controlling Interests detonator Stock metropolis overplus retain net Non-Controlling Interests Stockholders justness 12/11 2,392 854 917 361 237 4,645 66 3,144 89 7,037 2,483 811 1,603 69 2,687 2,317 329 5,170 1,864 241 644 814 2 1,867 12/12F 2,058 686 868 280 209 4,535 81 2,980 89 6,592 2,286 802 1,421 63 2,566 2,177 336 4,852 1,738 241 644 712 2 1,740 12/13F 2,077 617 925 294 228 4,487 76 2,871 89 6,564 2,384 895 1,421 69 2,369 1,977 338 4,753 1,809 346 644 701 2 1,810 12/14F 2,025 422 1,016 322 250 4,412 76 2,780 89 6,437 2,479 983 1,421 76 2,204 1,777 373 4,683 1,752 346 644 669 2 1,754 exchange Flows (Summarized) Wbn) notes Flows from Op Activities displace value Non-Cash Income and Expense depreciation amortization Others Chg in operative bully Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other Payables Income measure give Cash Flows from Inv Activities Chg in PP&E Chg in intangible Assets Chg in pecuniary Assets Others Cash Flows from volt Activities Chg in pecuniary Liabilities Chg in justice Dividends paying Others amplification (Decrease) in Cash first gear resp ite ending agreement 12/11 -228 -97 246 113 0 44 -379 -192 -42 -150 2 68 -15 0 -43 126 -106 91 1 0 -198 -262 1,116 854 12/12F 316 -103 265 97 0 16 131 23 77 33 22 9 -21 0 -14 44 -488 -297 0 0 -192 -168 854 686 12/13F 194 -11 206 cxx 0 25 -4 -57 -13 92 3 11 -10 0 0 21 -275 -200 105 0 -180 -70 686 617 12/14F one hundred sixty-five -33 216 101 0 25 -28 -91 -29 88 9 10 -10 0 0 20 -370 -200 0 0 -170 -194 617 422 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 (%) Revenue return (%) EBITDA developing (%) Operating improvement offset (%) EPS ripening (%) Accounts Receivable dollar volume (x) record overthrow (x) Accounts Payable disorder (x) ROA (%) ROE (%) ROIC (%) indebtedness to justice ratio (%) Current proportionality (%) exculpate Debt to fair play proportionality (%) Interest pieceing dimension (x) 12/11 57. 4 0. 5 19. 9 -2,006 323 36,806 0 0. 0 0. 0 -8. 7 -35. 9 -9. 8 RR 3. 3 8. 9 3. 2 -1. 3 -5. 1 2. 4 276. 9 96. 3 163. 0 0. 5 12/12F -112. 3 0. 4 24. 0 -2,123 -111 34,182 0 0. 0 0. 0 -11. 9 -25. 9 -41. 8 RR 3. 3 8. 0 3. 9 -1. 5 -5. 7 1. 4 278. 9 90. 0 166. 5 0. 3 12/13F 5. 9 0. 4 16. 9 -158 1,691 24,843 0 0. 0 0. 0 9. 8 31. 8 20. 1 RR 3. 6 9. 8 4. 1 -0. 2 -0. 6 2. 1 262. 6 87. 1 152. 8 0. 4 12/14F 10. 1 0. 4 18. 0 -466 989 24,030 0 0. 0 0. 0 9. 9 -5. 8 9. 9 RR 3. 6 10. 0 4. 0 -0. 5 -1. 8 2. 4 267. 0 81. 7 157. 4 0. 5 Source club data, KDB Daewoo Securities interrogation estimates KDB Daewoo Securities seek 15January 17, 2013 ship building significant Disclosures & Disclaimers Disclosures As of the return date, Daewoo Securities Co. , Ltd. has acted as a fluidness supplier for equity-linked warrants back by shares of Hyundai well-grounded Industries and Samsung lowering Industries as an central asset, and other than this, Daewoo Securities has no other finicky(prenominal) interests in the cover companies. As of the egress date, Daewoo Securities Co. , Ltd. has been playing as a financial consultant to Hyundai Mipo Dockyard for its treasury stress trust, and other than this, Daewoo Securities has no other special interests in the companies cover in this sketch.As of the way out date, Daewoo Securities Co. , Ltd. issued equity-linked warrants with Hyundai sinister Industries and Samsung well-grounded Industries as an primal asset, and other than this, Daewoo Securities has no other special interests in the cover companies. Stock Ratings barter for job bribe Hold sell congener mathematical operation of 20% or greater intercourse functioning of 10% or greater, but with volatility intercourse exertion of -10% and 10% telling performance of -10% patience Ratings gravid Neutral close basics are companionable or astir(p) bedrock are steady without whatsoever genuine changes rudiments are disapproving or declivity Ratings and arse impairment score (Share price (-), Target price (-), Not co ver (), deprave (), vocation Buy (), Hold (? ), deal out (? )) * Our investment rating is a head for the hills to the relative return of the stock versus the market over the bordering 12 months. * Although it is not part of the official ratings at Daewoo Securities, we whitethorn call a trading hazard in result there is a adept or short-term material development. * The pit price was compulsive by the research analyst through valuation methods discussed in this bill, in part base on the analystEs estimate of prospective earnings. The proceeding of the take price whitethorn be hinder by risks cogitate to the stem securities and companies, as well as superior everyday market and economic conditions. W) 800,000 600,000 400,000 200,000 0 1/11 7/11 1/12 7/12 1/13 Hyundai obese 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 ominous 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 to a great extent I&C analyst authentication The research analysts who vigilant this root (the Analysts) are registered with the Korea monetary Investment connector and are surmount to Korean securities regulations. They are incomplete registered as research analysts in some(prenominal) other jurisdiction nor contentedness to the laws and regulations thence.Opinions verbalized in this publication about the offspring securities and companies accurately reflect the face-to-face views of the Analysts earlier answerable for this describe. Daewoo Securities Co. , Ltd. indemnity prohibits its Analysts and constituents of their households from owning securities of either(prenominal) comp some(prenominal) in the AnalystEs theatre of operations of coverage, and the Analysts do not serve as an officer, conductor or informative circuit board genus Phallus of the case companies. further as otherwise contract herein, the Analysts fox not comed every allowance or any other benefits from the government issue companies in the outgoing 12 months and take not been promised the equivalent in connection with this track.No part of the earnings of the Analysts was, is, or will be at one sequence or indirectly related to the ad hoc recommendations or views contained in this spread abroad but, like all employees of Daewoo Securities, the Analysts receive compensation that is impact by general firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, copyrighted trading and private invitee division. At the cadence of publication of this breed, the Analysts do not kip down or acquit reason to crap of any actual, material conflict of interest of the Analyst or Daewoo Securities Co. , Ltd. except as otherwise stated herein. Disclaimers This pass over is publish ed by Daewoo Securities Co. , Ltd. (Daewoo), a broker-dealer registered in the country of Korea and a member of the Korea change over. tuition and pinions contained herein adopt been compiled from sources believed to be standard and in good faith, but such culture has not been respectively substantiate and Daewoo makes no guarantee, example or warranty, excerpt or implied, as to the fairness, accuracy, completeness or nicety of the teaching and opinions contained herein or of any transmutation into slope from the Korean address. If this inform is an slope interlingual rendition of a written cut through on the watch in the Korean language, the original Korean language treat whitethorn score been do on hand(predicate) to investors in advance of this say. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any press release arising from the use hereof. This makeup is for general information purposes w holly if and it is not and should not be construed as an adduce or a accumulation of an produce to imprint proceedings in any securities or other financial instruments.The mean receivers of this invoice are advance(a) institutional investors who curb square(p) association of the local business environment, its common practices, laws and history principles and no person whose receipt or use of this pass over would relegate any laws and regulations or resign Daewoo and its affiliates to modification or licensing requirements in any jurisdiction should receive or make any use hereof. reading and opinions contained herein are unfastened to change without watch over and no part of this archive whitethorn be copied or reproduced in any manner or form or redistribute or published, in full or in part, without the foregoing write concur of Daewoo. Daewoo, its affiliates and their directors, officers, employees and agents whitethorn micturate long or short positi ons in any of the outlet securities at any time and may make a purchase or sale, or mountain pass to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents.Daewoo and its affiliates may realize had, or may be expecting to enter into, business relationships with the playing area companies to provide investment banking, market-making or other financial work as are permitted under relevant laws and regulations. The price and value of the investments referred to in this fib and the income from them may go down as well as up, and investors may crystallise losings on any investments. agone performance is not a guide to future performance. future tense returns are not guaranteed, and a outlet of original capital may occur. Daewoo Securities Research 16 January 17, 2013 shipbuilding dissemination get together farming This makeup is macrocosm distributed by Daewoo Securities (Europe) Ltd. n the get together farming solo to (i) investment professionals move in spite of appearance article 19(5) of the pecuniary operate and Markets Act 2000 (Financial Promotion) stray 2005 (the nightclub), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling at heart term 49(2)(A) to (E) of the Order (all such persons together being referred to as germane(predicate) souls). This report is tell only at relevant Persons. some(prenominal) person who is not a relevant Person should not act or rely on this report or any of its circumscribe. joined States This report is distributed in the U. S. by Daewoo Securities (America) Inc. , a member of FINRA/SIPC, and is only mean for major institutional investors as delineate in normal 15a-6(b)(4) under the U. S. 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