Hanwha Engine makes large low-speed two-stroke diesel engines and four-stroke medium-speed engines for merchant ships such as container carriers, LNG carriers and tankers, selling them to shipbuilders at home and abroad; its results track the global flow of new shipbuilding orders, and a rising share of dual-fuel engines has lifted the price per unit so that more profit is left even on the same revenue. First-quarter provisional results disclosed on April 24 revealed a jump in profit, confirmed by the quarterly report on May 14, and in between an engine-order filing on May 13 showed new work continuing to fill in on the shipbuilding cycle. What stands out lately is that more than three years' worth of high-priced engine orders have piled up and are being recognized sequentially at high margins, with a 31.2% ROE and a 14.9% Q1 operating margin, while even last year's 26.4x P/E steps down a notch once this year's earnings are reflected; still, financial headroom, with a debt ratio above 200% and interest coverage below 1x, and the possibility of slowing shipbuilding orders should be checked alongside.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 204.9%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- Revenue rose 14.1% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 8.5% higher than a year earlier.
- ROE is 31.2% (controlling-interest basis). It is above the sector average.
- Operating margin is 9.5%.
- P/B is high versus peers, a stretch on an asset basis.
Ownership & governance As of 2025-12-31
Largest shareholder Hanwha Impact 32.77% (corporate)
Controlling bloc incl. related parties 32.77%
With the controlling bloc holding 33%, the ownership structure is stable.
🔎 In-depth analysis
- Hanwha Engine makes and sells the large marine engines that serve as a ship's heart.
- Its mainstay is the low-speed two-stroke diesel engine (the large main engine) for merchant ships such as container carriers, LNG carriers and tankers, alongside four-stroke medium-speed engines used in power generation and mid-sized vessels.
- Most revenue comes from this one branch, marine engines, and the customers are shipbuilders at home and abroad.
- In other words, the more ships a shipyard wins, the more engine orders for those ships flow to Hanwha Engine, so results move with the global flow of new shipbuilding orders.
- Recently, as the share of dual-fuel engines (which run on two fuels such as LNG and methanol) has grown in response to environmental regulation, the price per unit has risen, producing a trend in which more profit is left even on the same revenue.
- The latest close is ₩42,600 and the market cap is ₩3.6 trillion.
- The price sits below both its 20-day line (₩53,372) and its 60-day line (₩63,086).
- Trading below both the short- and medium-term moving averages, the trend looks subdued.
- The RSI (a supplementary gauge that scores upward versus downward force over the past 14 days on a 0-100 scale) is 34.1, a neutral level.
- The one-month change is -19.8%, the three-month change is -3.5%, and the price sits -52.4% below its 52-week high.
- Relative strength versus the KOSPI is 40 (on a 1-99 scale that weights recent performance versus the index over the past year more heavily; higher means stronger than the market).
- That places it in roughly the top 60% of all stocks by strength.
- Over the past three months it lagged the index by 26.4%.
- It is best to read the chart alongside trading volume and the dates of disclosures.
- The P/E ratio (how many times a year's earnings the price is) of 20.46x looks high on last year's confirmed results.
- But this company's earnings have just passed an inflection and are swelling fast, so the trailing yardstick tends to understate current strength.
- Measured against this year's higher earnings the burden drops a notch, and that picture is closer to current earning power.
- Profitability is solid: ROE (how much is earned in a year on equity) is 31.2%, among the highest in the sector, with a net margin of 12.7% and an operating margin of 9.5% (full-year 2025, rising to 14.9% in Q1), so the core business is genuinely making money.
- On finances, the debt ratio (debt relative to equity) of 204.9% is not low, and the interest coverage ratio (capacity to cover interest with operating profit) is below 1x, a point to watch as earnings accumulate and improve.
- Over five years the change in constitution is clear.
- Operating profit was in the red at -₩39.8 billion in 2021 and -₩29.5 billion in 2022, then turned positive at ₩8.7 billion in 2023, ₩71.5 billion in 2024 and ₩130.1 billion in 2025 (+81.8%), rising sharply each year after the turnaround.
- Net profit was also in the red through 2023 before recovering to ₩79.2 billion in 2024 and ₩173.8 billion in 2025 (+119.5%).
- Revenue grew from ₩599.0 billion in 2021 to ₩1.3711 trillion in 2025, about 23% a year on average over five years.
- In the first quarter of 2026, revenue of ₩345.2 billion (+8.5%) came with operating profit of ₩51.4 billion (+130.3%) and net profit of ₩52.9 billion (+172.3%), so while the top line grew in the single digits, profit more than doubled.
- The reason for this earnings leverage is clear: cheap past orders are being pushed out while high-priced recent orders and dual-fuel engines are booked as revenue, improving per-unit profitability, and the portion of revenue beyond fixed costs drops to profit.
- With an order backlog exceeding three years and a rising share of high-priced volume, this year's earnings are expected to grow noticeably above last year's.
- The main thread of this year's filings is orders and earnings.
- On April 24 a consolidated provisional-results fair disclosure first revealed the Q1 jump in profit, and the quarterly report on May 14 formally confirmed the figures.
- In between, a single-buyer supply contract (engine order) filing on May 13 showed new work continuing to fill in on the shipbuilding cycle.
- On May 7, an investor-briefing notice set up a venue for the company to explain business conditions directly, and on June 10 a 'clarification of rumors or media reports' filing appeared, in which the company stated its official position on talk circulating in the market, coinciding with a phase of high share-price volatility.
- Read as a sequence rather than as individual news, these filings show a cycle phase in which orders fill future revenue and that revenue feeds through to results at improved margins.
- The strengths are distinct.
- With shipbuilding orders alive and green regulation lifting demand for dual-fuel engines, more than three years' worth of high-priced engine orders have piled up and are being recognized sequentially at high margins.
- A 31.2% ROE and a 14.9% Q1 operating margin back this up.
- The valuation also looks different inside than out.
- The 26.4x P/E on last year's confirmed results looks high, but reflecting this year's higher earnings the burden steps down a notch, so read alongside the earnings trend it is not an unreasonable price.
- On the caution side, the debt ratio exceeds 200% and interest coverage is still below 1x, so financial headroom needs continued checking, and if shipbuilding orders slow the pace of new orders could fall.
- In sum, this is a phase in which earnings keep improving so long as the shipbuilding cycle and demand for green engines hold, while financial leverage and the possibility of an order slowdown are the checkpoints on the other side.
🔎 Valuation vs peers Fairly valued
The primary peers are dedicated marine-engine makers whose business is closest (HD Hyundai Marine Engine, STX Engine), with the large shipbuilders that are the source of engine demand (Hanwha Ocean, Samsung Heavy Industries, HD Korea Shipbuilding & Offshore Engineering) viewed together as a reference group.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| HD Hyundai Marine Engine | 11.20x | 3.78x | 33.77% |
| Hanwha Ocean | 19.33x | 3.90x | 20.19% |
| HD Korea Shipbuilding & Offshore Engineering | 10.69x | 1.74x | 16.32% |
| Samsung Heavy Industries | 33.80x | 4.44x | 13.15% |
(a) Against the most direct peer group, dedicated marine-engine makers, Hanwha Engine's last-year confirmed 26.4x P/E and 8.3x P/B are clearly higher than HD Hyundai Marine Engine (14.1x P/E, 4.8x P/B). (b) That said, this is an inflection stock whose earnings are rising fast, so it is hard to judge on a single last-year yardstick. On this year's earnings reflecting Q1 confirmed results, the order backlog and the margin trajectory, the burden steps down a notch, and given the high ROE and pace of earnings growth it is not an extremely expensive spot. (c) Conversely, there are peers growing faster on lower multiples, so it is also hard to see clear undervaluation. Weighing the strengths (profitability, orders) against the burdens (financial leverage, relative multiples), the valuation at this point looks to be in an Overvalued zone.
Price history Close · MA20 · MA60
The latest close is ₩42,600 and the market capitalization is ₩3.6 trillion. The price sits below its 20-day moving average (₩53,372) and below its 60-day moving average (₩63,086). 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 34.1, a neutral level. The one-month change is -19.8%, the three-month change is -3.5%, and the position relative to the 52-week high is -52.4%. Relative strength versus the KOSPI is 41 (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 40% of all stocks. Over the past three months it lagged the index by 26.4%. 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 -26.38% / 6M -39.08% / 12M -32.20%
Key metrics vs whole-market median
Valuation
The P/E of 20.46x is above the whole-market median (13.81x). The P/B of 6.39x is above the whole-market median (1.15x). 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.
Profitability & financials
Return on equity (ROE) is 31.2%, above the whole-market average (5.0%). The operating margin is 9.5%. The debt ratio is 204.9%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $566.3M | $796.8M | $908.7M | +14.05% ↓ slower |
| Operating profit | $5.8M | $47.4M | $86.2M | +81.83% ↓ slower |
| Net profit | -$282,624 | $52.5M | $115.2M | +119.50% |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $397.0M | $506.5M | $566.3M | $796.8M | $908.7M |
| Operating profit | -$26.4M | -$19.6M | $5.8M | $47.4M | $86.2M |
| Net profit | -$26.3M | -$26.7M | -$282,624 | $52.5M | $115.2M |
| Revenue CAGR | 4-yr avg 23.00% | ||||
Revenue rose 14.1% year over year (2023 ₩854.4 billion → 2024 ₩1.2 trillion → 2025 ₩1.4 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 81.8% year over year. The pace of that profit growth is gradually easing. Over the 5 years on record, revenue compound annual growth (CAGR) is 23.0%. The two-year revenue CAGR is 26.7%. In the most recent quarter (Q1 2026), revenue was 8.5% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 31.2% points to solid profitability.
- Revenue grew 14.1% year over year, a sign of growth.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-13UpdateMarine-engine single-buyer supply contract filing. An official contract disclosure confirming that new engine orders continue on the new-ship cycle.In the short term a signal of backlog replenishment; in the medium term it feeds future quarterly results depending on revenue-recognition timing. Source
- 2026-04-24EarningsConsolidated operating (provisional) results fair disclosure. Q1 2026 revenue ₩345.2 billion, operating profit ₩51.4 billion (+130.3%), net profit ₩52.9 billion (+172.3%), with profit rising faster than revenue.Results showing that profitability has structurally stepped up as high-priced orders are converted to revenue; the starting point of full-year earnings improvement. Source
- 2026-05-14FilingQ1 2026 quarterly report. The figures announced as provisional results were confirmed in formal financial statements.A first-line source for verifying confirmed results, providing a basis to check revenue mix, order backlog and financial structure (debt ratio, interest coverage) together. Source
- 2026-05-07IRInvestor-briefing notice. An official communication schedule for the company to explain results and business conditions directly.For the short-term price this can be a spent-catalyst factor, but it is a channel that reaffirms the basis for the profitability improvement. Source
- 2026-06-10UpdateClarification of rumors or media reports. A filing in which the company stated its official position on talk circulating in the market.The clarification itself does not change results, but it can affect market sentiment in a phase of high short-term volatility. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 operating profit | ₩51.4 billion(+130.3%) | ₩51.4 billion | Confirmed | link |
| Q1 2026 revenue | ₩345.2 billion(+8.5%) | ₩345.2 billion | Confirmed | link |
| FY2025 annual operating profit | ₩130.1 billion(+81.8%) | ₩130.1 billion | Confirmed | link |
| 2026 estimated net profit | approx. ₩270.0 billion(self-estimate) | — | Unverified | link |
Recent filings
- 2026-06-10Disclosure
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-19OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-14PeriodicQuarterly report
- 2026-05-13Single supply/sales contract
- 2026-05-07Disclosure
- 2026-05-06OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-30OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-24EarningsFair-disclosure notice
- 2026-04-17EarningsEarnings disclosure
- 2026-04-08OwnershipOwnership-change filing
📖 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.