Samsung Heavy Industries is a shipbuilder that earns money by winning orders for expensive ships in advance and building and delivering them over two to three years. Its core products are high-margin LNG carriers and offshore plants such as FLNG units, where a single contract can run into the trillions of won, so the order backlog being built today sets several years of future results in advance. From mid-May to early June, orders for ships and offshore facilities came in one after another, and the company set a 2026 revenue target of ₩12.8 trillion, pointing to a large increase over 2025. What stands out lately is that an order backlog holding about three years of work and margin improvement rising each quarter are strengths, while high financial leverage — a debt ratio of 360% and an interest-coverage ratio of 1.44x — and cost variables such as the exchange rate and steel-plate prices are points to watch.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 360.3%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 78.6%).
- Revenue rose 7.5% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 16.4% higher than a year earlier.
- ROE is 13.2% (controlling-interest basis). It is below the sector average.
- Operating margin is 8.1%.
- The P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder Samsung Electronics 15.23% (individual)
Controlling bloc incl. related parties 20.85%
With the controlling bloc holding 21%, control is maintained but the free float is relatively large.
🔎 In-depth analysis
- Samsung Heavy Industries is a shipbuilder that makes and sells ships.
- Its revenue has two main streams.
- The first is merchant ships, and among those, LNG (liquefied natural gas) carriers are the core.
- Because they are special vessels that store and transport liquefied gas at minus 162 degrees Celsius, they are hard to build and command high prices, so profit per ship is far greater than for ordinary cargo vessels.
- Added to this are ultra-large container ships and gas and oil carriers.
- The second is offshore plants, building large structures such as FLNG (floating LNG production units) that liquefy, store, and offload natural gas at sea.
- Because a single contract can reach into the trillions of won, one order can swing results significantly.
- Ultimately this company's money comes in as it 'wins orders for expensive ships in advance and builds and delivers them over two to three years.' So today's revenue and profit are the result of orders won years ago, and the backlog being built now sets several years of future results in advance.
- The recent closing price is ₩20,950 and the market cap is ₩18.4 trillion.
- The price sits below its 20-day line (₩24,798) and below its 60-day line (₩28,147).
- Being below both short- and medium-term moving averages, the trend looks subdued.
- The RSI (a gauge that compares upward and downward strength over the last 14 days on a 0–100 scale) is 31.8, a neutral level.
- The price is down 19.4% over one month and down 21.8% over three months, and sits 39.1% below its 52-week high.
- Relative strength versus the KOSPI is 31 (1–99, a measure of return versus the index over the past year weighted toward recent performance; higher means stronger than the market).
- That places it in roughly the top 69% of all stocks by strength.
- Over the past three months it lagged the index by 40.4%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- On a 2025 basis, the P/E is 33.80x and the P/B is 4.44x.
- On the numbers alone this looks high, but there is a catch here.
- 2025 was the 'first year of recovery,' in which the company had just swung from a long stretch of losses to profit, so the earnings base (the denominator) is still small.
- A P/E divided by the earnings of a year just out of losses is bound to look high, so it is hard to conclude it is expensive on the P/E on last year's results alone.
- Profitability is clearly improving.
- ROE (how much a company earns in a year on its equity) is a sound 13.2%, and the operating margin is 8.1%.
- On the balance sheet, the shipbuilding sector's characteristic weaknesses remain.
- The debt ratio is high at 360%, the current ratio (assets convertible to cash within a year against debts due within a year) is 78.6% so short-term liquidity has limited room, and the interest-coverage ratio (how many times operating profit can cover interest) is 1.44x, a structure in which interest costs weigh net profit down.
- That is, even as operating profit rises quickly, financial costs shaving net profit is a point to keep watching.
- The recovery trajectory is clear.
- Operating profit went from −₩1.31 trillion in 2021, −₩0.85 trillion in 2022, +₩0.23 trillion in 2023, +₩0.50 trillion in 2024, to +₩0.86 trillion in 2025, widening each year after turning from loss to profit.
- Net profit likewise surged from −₩0.15 trillion in 2023 to +₩0.064 trillion in 2024 and +₩0.546 trillion in 2025 after the turnaround.
- In the first quarter of 2026, revenue was ₩2.90 trillion (+16.4% year on year) and operating profit ₩0.273 trillion (+121.9%), with the operating margin rising from 8.1% for last full year to 9.4%.
- As the share of expensive LNG carriers and FLNG rises and low-priced work taken on in the past rolls off, margins step up one level at a time.
- Simply taking this trend as 'first quarter times four' would underestimate the pace of recovery.
- Reflecting the trajectory of quarterly profit rising further quarter by quarter, it is natural to see 2026 operating profit at around ₩1.2 trillion and net profit rising above last year's ₩0.546 trillion.
- More important is the year after.
- The delivery-basis backlog holds about three years of work, and large projects such as FLNG are lined up behind it, so there is a strong chance 2027 revenue and profit will rise higher than 2026.
- It is closer to the facts to see this as climbing the middle of the slope, not the peak of the cycle.
- Recent disclosures are almost entirely 'single sale and supply contracts' — that is, orders for ships and offshore facilities.
- From mid-May to early June, order contracts came in one after another (5/18, 5/27 with three, 6/2, 6/4, 6/8 with three, and others), and some are amendment disclosures refining contract terms.
- That orders keep piling up without pause means the material for revenue over the next two to three years keeps being filled — the most important signal for a shipbuilder.
- The company set a 2026 revenue target of ₩12.8 trillion, officially pointing to a large increase over 2025.
- Separately, in early June a corporate governance report and a large-business-group status disclosure and other periodic disclosures also appeared.
- Separate dividend information is not captured in the official classification data, so dividends are hard to treat as an investment point at present.
- The strong conditions are clear.
- As a large shipbuilder established in the high-value LNG-carrier and FLNG fields, it has high revenue visibility thanks to a backlog holding about three years of work, and is in a recovery phase where margins step up one level each quarter.
- Even if the P/E on last year's results looks high, that is closer to an illusion caused by the small earnings base of the first year of a profit recovery; because the structure is one in which profit grows larger toward this year and next, the burden is much lighter on a forward-looking basis.
- Conversely, the weak conditions must also be stated frankly.
- With a debt ratio of 360% and an interest-coverage ratio of 1.44x, financial leverage is high, so even as operating profit rises, financial costs weighing net profit down constrain the pace of net-profit recovery.
- Also, there is a lag before orders turn into revenue, so short-term quarterly results can be uneven, and cost variables such as the exchange rate, steel-plate (ship-grade steel) prices, and labor costs can shake margins.
- In sum, 'as long as orders keep piling up and margin improvement continues,' the earnings-growth story works powerfully, and 'if order momentum cools or financial costs and input costs erode margins,' it weakens.
🔎 Valuation vs peers Fairly valued
Large domestic shipbuilders. Compared against a pure-shipbuilding peer set with similar LNG-carrier and offshore-plant business composition.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| HD Hyundai Heavy Industries | 37.60x | 5.70x | 15.15% |
| Hanwha Ocean | 19.33x | 3.90x | 20.19% |
| HD Korea Shipbuilding & Offshore Engineering | 10.69x | 1.74x | 16.32% |
The P/E of 37.1x on last year's results is upper-middle — lower than HD Hyundai Heavy Industries (41.8x) and higher than Hanwha Ocean (24.1x) within the pure-shipbuilding peer set. The P/B of 4.88x is also lower than HD Hyundai Heavy Industries (6.34x). But there is a catch in looking at the trailing P/E alone. Samsung Heavy Industries turned to profit most recently among the peers, so its earnings base (the denominator) is still small and its P/E is captured high. With operating profit rising quickly each quarter and the margin stepping up from 8.1% into the 9% range, this multiple falls meaningfully on a forward-looking basis. ROE of 13.2%, somewhat lower profitability than peers, and the financial burden of a 360% debt ratio are discount factors, but viewing together that its P/E and P/B are lower than the closest pure shipbuilder and that earnings are still in the early recovery phase, we judge its current position to be 'fairly valued.' HD Korea Shipbuilding & Offshore Engineering is holding-company in character, so it is treated only as a reference in simple multiple comparisons.
Price history Close · MA20 · MA60
The latest close is ₩20,950 and the market capitalization is ₩18.4 trillion. The price sits below its 20-day moving average (₩24,798) and below its 60-day moving average (₩28,147). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 31.8, a neutral level. The one-month change is -19.4%, the three-month change is -21.8%, and the position relative to the 52-week high is -39.1%. Relative strength versus the KOSPI is 31 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 31% of all stocks. Over the past three months it lagged the index by 40.4%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -40.38% / 6M -47.57% / 12M -45.04%
Key metrics vs sector median
Valuation
The P/E of 33.80x is above the sector median (12.45x). The P/B of 4.44x is above the sector median (1.64x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 11.3%, initial growth 4.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 13.2%, in line with the sector average (15.0%). The operating margin is 8.1%. The debt ratio is 360.3%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $5.3B | $6.6B | $7.1B | +7.54% ↓ slower |
| Operating profit | $154.7M | $333.2M | $571.5M | +71.52% ↓ slower |
| Net profit | -$98.3M | $42.3M | $361.6M | +754.06% |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $4.4B | $3.9B | $5.3B | $6.6B | $7.1B |
| Operating profit | -$869.5M | -$566.3M | $154.7M | $333.2M | $571.5M |
| Net profit | -$957.8M | -$410.5M | -$98.3M | $42.3M | $361.6M |
| Revenue CAGR | 4-yr avg 12.61% | ||||
Revenue rose 7.5% year over year (2023 ₩8.0 trillion → 2024 ₩9.9 trillion → 2025 ₩10.7 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 71.5% year over year. The pace of that profit growth is gradually easing. Over the 5 years on record, revenue compound annual growth (CAGR) is 12.6%. The two-year revenue CAGR is 15.3%. In the most recent quarter (Q1 2026), revenue was 16.4% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 13.2% points to solid profitability.
Points to watch
- Debt far exceeds equity (debt ratio 360.3%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 78.6%).
- Revenue rose 7.5% year over year, and the pace is slowing (3-year trend: rising).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-06-08UpdateSingle sale and supply contracts for ships and offshore facilities (multiple items on the same day, some including amendments)Adds to a backlog that will convert into revenue over the next two to three years. The higher the share of high-value vessel types, the more favorable for medium-term margins. Source
- 2026-06-02UpdateSingle sale and supply contract disclosureA signal that order flow continues without interruption. A core input for a shipbuilder's earnings visibility. Source
- 2026-05-27UpdateSingle sale and supply contracts (three on the same day)With multiple orders concentrated in a short span, it supports order momentum. Source
- 2026-06-01FilingPeriodic disclosure of the corporate governance report and large-business-group statusA periodic disclosure on governance and group status, with limited effect on short-term results. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-08Single supply/sales contract (amended)
- 2026-06-08Single supply/sales contract
- 2026-06-08Single supply/sales contract
- 2026-06-04Single supply/sales contract (amended)
- 2026-06-02OwnershipLargest-shareholder ownership change report
- 2026-06-02Single supply/sales contract
- 2026-06-01Corporate governance report
- 2026-06-01Large-business-group status disclosure
- 2026-05-27Single supply/sales contract
- 2026-05-27Single supply/sales contract
- 2026-05-27Single supply/sales contract
- 2026-05-18Single supply/sales contract
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.