HD Hyundai Marine Engine makes the low-speed diesel engines (the main engine) that serve as the heart of large merchant ships and supplies them to shipyards. Its two revenue pillars are finished engines for newbuild vessels and an aftermarket that sells parts to ships in service, and since joining the HD Hyundai group in 2024 its profit structure has improved as direct contracts and high-spec models take a larger share. From late April to mid-June it signed five supply contracts totaling roughly ₩262 billion (more than 60% of last year's revenue, for delivery in 2028-2029). What stands out is that engine margins are rising, the balance sheet is net cash, and orders are stacking up thickly, leaving a valuation that, even after accounting for earnings quality, is lower than large shipbuilders; but because customers are concentrated in Chinese shipyards, results track China's newbuild-order cycle and the exchange rate.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 27.4% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 60.8% higher than a year earlier.
- ROE is 33.8% (controlling-interest basis). It is above the sector average.
- Operating margin is 18.9%.
- P/B is high versus peers, a stretch on an asset basis.
Ownership & governance As of 2025-12-31
Largest shareholder HD Korea Shipbuilding & Offshore Engineering 35.05% (corporate)
Controlling bloc incl. related parties 35.09%
With the controlling bloc holding 35%, the ownership structure is stable.
🔎 In-depth analysis
- This company makes the low-speed diesel engines (the main engine, the heart of a ship) that go into large merchant vessels and supplies them to shipyards.
- Its large revenue pillar is finished engines fitted to newbuild ships, with an aftermarket business selling parts to ships already in service layered on.
- Originally STX Heavy Industries, it changed its name when it joined the HD Hyundai group in July 2024.
- Since joining the group, its profit structure has improved as it shifted from making engines under borrowed licenses to a direct-contract model, and as higher-priced, high-spec engines took a larger share.
- The latest close is ₩54,500 and the market cap is ₩1.8 trillion.
- The price sits below the 20-day line (₩63,545) and below the 60-day line (₩77,783).
- Trading under both the short- and medium-term moving averages, the trend looks subdued.
- The RSI (a supplementary gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 37.4, a neutral reading.
- The price is down 14.2% over one month and down 27.8% over three months, and it stands 52.8% below its 52-week high.
- Relative strength versus the KOSPI is 19 (on a 1-99 scale that weights recent returns against the index over the past year more heavily toward the present; higher means stronger than the market), placing it in roughly the top 81% of all stocks by strength.
- Over the past three months it lagged the index by 44.6%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- Profitability is notably strong.
- ROE is a high 33.8% and the operating margin is 18.9%.
- That said, last year's net profit (₩165.1 billion) was more than double operating profit (₩75.9 billion), the result of non-operating gains concentrated in Q4 last year (including the effect of recognizing tax assets accumulated during earlier loss-making years once profits began to appear).
- In other words, last year's net profit includes a large one-off portion booked once.
- The balance sheet is solid: net debt is negative (a net-cash position with cash exceeding debt by ₩94.3 billion), and FCF yield (the ratio of actual cash generated to market cap) is a healthy 7.8%.
- EV/Sales (enterprise value including debt divided by revenue) is 5.1x.
- The top line has grown quickly.
- Revenue rose from ₩137.4 billion in 2021 to ₩402.4 billion in 2025, a five-year compound annual growth rate of 30.8%.
- Operating profit turned from a loss in 2021 to a positive ₩75.9 billion in 2025.
- In Q1 2026 revenue was ₩133.5 billion, up 60.8% from the same quarter last year, and operating profit surged 217% to ₩32.6 billion.
- A key driver was the engine-segment margin rising to as high as 24.2%.
- This year's profit direction is upward: Q1 operating profit alone (₩32.6 billion) already equals 43% of last year's full-year operating profit.
- With a larger share of high-price volume overlapping with the exchange rate and cost savings, this year's operating profit is on track to grow substantially from last year.
- On top of that, new engine supply contracts received over the past two months from Chinese and domestic shipyards have stacked up to more than 60% of annual revenue, forming the basis for future delivery volume.
- Supply contracts are at the center of the recent flow.
- Five single-sale/supply contracts were disclosed from late April to mid-June.
- China's Wuhu Shipyard and Xiamen-affiliated yards are the main customers, and in June the company also signed a ₩46.8 billion contract with domestic Samsung Heavy Industries.
- Combined, the five contracts total about ₩262 billion, more than 60% of last year's annual revenue.
- With contract periods running through 2028-2029, this secures several years' worth of engine delivery volume.
- Q1 preliminary results were disclosed in May, and routine disclosures on the large business group and governance also followed since the group merger.
- The strengths are clear.
- Engine margins are in a rising phase, the balance sheet is net cash, and new orders are stacking up thickly.
- The P/E of 13x on last year's net profit looks cheaper than reality because it includes a one-off gain.
- But given that this year's operating profit is on track to grow substantially, the valuation, even after accounting for earnings quality, is still lower than that of large shipbuilders.
- There are cautions too: with customers concentrated in Chinese shipyards, results track China's newbuild-order cycle.
- Because margins improve when the exchange rate is favorable, that effect can shrink if the exchange rate reverses.
- That the share price has fallen sharply from its high can be seen as already reflecting some of this cyclical and currency sensitivity.
🔎 Valuation vs peers Fairly valued
We look together at a direct peer that makes ship engines (STX Engine) and at the large shipbuilders that buy these engines (HD Hyundai Heavy Industries, Hanwha Ocean).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| STX Engine | 14.41x | 2.90x | 20.10% |
| HD Hyundai Heavy Industries | 37.60x | 5.70x | 15.15% |
| Hanwha Ocean | 19.33x | 3.90x | 20.19% |
Against the direct peer STX Engine (P/E of 16.5), it sits at a similar or slightly lower level. It is far lower than the large shipbuilders that buy its engines (HD Hyundai Heavy Industries at 43.8x, Hanwha Ocean at 25.7x). The P/E of 13x on last year's net profit carries an illusion of looking cheaper than reality because of one-off gains concentrated in Q4 last year. That said, reflecting the trajectory of substantially rising operating profit this year, the valuation adjusted for earnings quality is still below that of the large shipbuilders. Viewing profitability (ROE of 33.8%) and the balance sheet (net cash) together, it is hard to see this as an excessively expensive position.
Price history Close · MA20 · MA60
The latest close is ₩54,500 and the market capitalization is ₩1.8 trillion. The price sits below its 20-day moving average (₩63,545) and below its 60-day moving average (₩77,783). 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 37.4, a neutral level. The one-month change is -14.2%, the three-month change is -27.8%, and the position relative to the 52-week high is -52.8%. Relative strength versus the KOSPI is 20 (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 19% of all stocks. Over the past three months it lagged the index by 44.6%. 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 -44.65% / 6M -63.79% / 12M -47.72%
Key metrics vs sector median
Valuation
The P/E of 11.20x is below the sector median (14.44x). The P/B of 3.78x is above the sector median (1.44x). 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 10.1%, initial growth 2.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 0.846x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 33.8%, above the sector average (5.0%). The operating margin is 18.9%. The debt ratio is 66.6%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $162.0M | $209.3M | $266.7M | +27.42% ↓ slower |
| Operating profit | $12.2M | $22.0M | $50.3M | +128.69% ↑ faster |
| Net profit | $21.0M | $50.2M | $109.4M | +117.88% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $91.1M | $118.9M | $162.0M | $209.3M | $266.7M |
| Operating profit | -$5.3M | $7.5M | $12.2M | $22.0M | $50.3M |
| Net profit | -$5.2M | $9.4M | $21.0M | $50.2M | $109.4M |
| Revenue CAGR | 4-yr avg 30.82% | ||||
Revenue rose 27.4% year over year (2023 ₩244.4 billion → 2024 ₩315.8 billion → 2025 ₩402.4 billion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 128.7% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 30.8%. The two-year revenue CAGR is 28.3%. In the most recent quarter (Q1 2026), revenue was 60.8% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 33.8% points to solid profitability.
- Revenue grew 27.4% year over year, a sign of growth.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-06-18UpdateSigned a ship-engine supply contract with China's Wuhu Shipyard for ₩28.0 billion (7.0% of recent revenue), delivery due 2028-09-30.Adds to medium-term delivery volume. The flow of orders for Chinese shipyards continued into June. Source
- 2026-06-12UpdateSigned a ship-engine supply contract with domestic Samsung Heavy Industries for ₩46.8 billion (11.6% of recent revenue), delivery due 2028-08-09.Secures a contract for a large domestic shipbuilder amid the concentration in China. A sign of a broadening customer base. Source
- 2026-05-28UpdateSigned a ship-engine supply contract with China's Wuhu Shipyard for ₩55.8 billion (13.9% of recent revenue), delivery due 2028-05-30.A large single contract. The centerpiece of the multiple orders in May-June. Source
- 2026-04-29UpdateSigned a ship-engine supply contract with China's Xiamen (XIAMEN XMXYG) shipyard for ₩106.8 billion (26.5% of recent revenue), delivery due 2029-09-09.A large contract exceeding a quarter of annual revenue, forming the basis for delivery volume through 2029. Source
- 2026-05-07EarningsQ1 2026 preliminary results: revenue of ₩133.5 billion (+60.8% year on year), operating profit of ₩32.6 billion (+217% year on year), net profit of ₩28.1 billion (+103% year on year).Operating profit improved substantially on rising engine-segment margins and higher delivery volume. Net profit normalized to around the level of operating profit. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-04OwnershipOwnership-change filing
- 2026-06-04OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-04OwnershipLargest-shareholder ownership change report
- 2026-06-04OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-29Corporate governance report
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Single supply/sales contract
- 2026-05-28Single supply/sales contract
- 2026-05-19PeriodicQuarterly report (amended)
- 2026-05-15PeriodicQuarterly report
- 2026-05-07EarningsFair-disclosure notice
- 2026-04-29Single 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.