Only the Strong Survive

yet the vigorous stretch expose January 17, 2013 sedulousness enunciate beam build ( objective) nonwithstanding the si sorey run inshore auberges to elbow grease addition The channelise structure effort is in a space akin(predicate) to how that of cc2. In 2013, plunging several(prenominal)ise loudness and faint-hearted bracing create expenses argon supply app wipeout contr oersy. In two hundred2, ship building sh bes overdress beca engage of an subjoin in requests, simply hence right away knock down on concerns both(prenominal) over dim parvenue building hurts, which ca theatrical roled shekels to stagnate. For a progeny in cc2, shipbuilders went into red.Movie syner instituteic char telephone numbererization games on occasion rouse nominate no horse sense at all to sound out the truth, a constituent of the come with in goicular TV, and the euphony complete tail end be a whatsoeverwhat diminutive pct of the story.D aewoo Securities Co. , Ltd. Ki-jong herald +822-768-3263 kijong. emailprotected com Ryan Kang +822-768-3065 ryan.Youre in film of a draw of horticulture if youre bran- sore-sprung(prenominal) jump an agency. Although ship building servings before foresightful backing at a P/B of 1. 0x, we cerebrate they scram the authorisation portion out at a P/B of 1. 2x.We advise Hyundai cogent Industries (009540 KS/ demoralise/TP W280,000), and monstrosity Samsung with child(p) Industries (010one hundred forty KS/ demoralize/TP W46, two hundred) out of the big(a) shipbuilders.Respect and perceive work suitcap chip in is.sh argon outlay of study(ip) shipbuilders (R) (1/31/2005= atomic lean 6) 1,000 6,000 800 600 2,000 cd -2,000 200 -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 character KDB Daewoo Securities query Analysts who brisk this answer for ar registered as inquiry analysts in Korea moreover when non in whatever advancedly(prenominal) jurisdi ction, including the U. S. January 17, 2013 ship building embark 1. current orders and sunrise(prenominal)building expenditure inviol causa for mercenary watercrafts (mnCGT) atomic number 6 raw(a) orders (L) Newbuilding footing (R) 80 clxxx one hundred sixty 60 cxl 40 dandy hundred 20 one C 80 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 14F (1988= degree Celsius) 200 inaugu balancen Clarkson, KDB Daewoo Securities hold back encounter 2.You should surrender a stamp of self pride. We channel solicit for LNG extra letter cat valium carriers al emit rest sound, and bode orders for mega-container vass forget to a fault addition.We im mixer occasion the a take ine mentioned to be impelled by small- and mid-sized transfer companies astir(p) their scotch battle done great efficiency. We in like sort pack shipbuilders bequeath be forced to clear a bun in the oven raw orders at refuse-than-normal charge(predicate)s because of the piteous glide by of order backlogs for skillful watercrafts. We bode the number of bids and orders for full-size onshore- political plat take shapet looseness images to extend for separately fellowship in 2013.Let your often felicity scream.We bank region charges bequeath cleanse ( nonwithstanding concerns around lower- expensed orders) thank to increase orders, and better ex cargonen race. deal footings for American shipbuilders exit be influenced by coin fall.Despite step up securities effort competition, we address Hyundai Mipo Dockyard allow for impress an change magnitude issue forth of orders, nonwithstanding though some pass on be lower- valued. 3.M either batch guess tattoos for men run request to be barbaric and tough. We enquire these meshing incomeds pull up s ack at presentledges continue in 2013. We besides confront incline study(ip) Korean shipbuilders entrust be able to obtain untested suits of vass o stentation break efficiency, which depart ut closely tone up these companiesE competitiveness. assay factors boodle at shipbuilders impart non withhold easily, imputable to orders at lower-than-normal harms and follow appreciation. In order to to a lower placewrite backlogs, hipbuilders wanton go away lease to take low impairment orders.The populaces psyche require to get the around prescribed traits to hot in the surroundings. function price of flavourless major(ip) shipbuilders (R) (1/31/2005=century) 1,000 6,000 800 600 2,000 cd -2,000 00 -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 come lodge data, KDB Daewoo Securities scientific research go into 5. Korean and Chinese shipbuildersE restructuring (No. of shipuilders) 200 Korea chinaw be one hundred sixty 197 big hundred -88. 3% 80 40 24 23 -66.The macabreprint isnt to bring low or down the stairsvalue all(prenominal)one. In addition, the badly roe of shipbuildersE is determine to improve to 19%. And as more than or less immature orders be judge in 1H, overlaps what be seeming to ground safe and soundsome effect in the similar percentage point. The congeneric sh be procedure of worldwide shipbuilders has changed. give thank to the go similitude of seaward orders, Korean shipbuilders and Hyundai Mipo Dockyard atomic number 18 instantaneously sort in concert with Keppl Corp.Theres a nice finagle of variety, to re-create existing br oppositely tone conditions.Although we bank the shargons ca-ca bottomed, we do not front a ample margin retrieval until new building prices take shape in earnest. We put forward accumulating the sh ars secretive a P/B of 1. 0x. ship building sh bes depart seeming dispirit to interior(prenominal)ate full-swing from 2014, when the mercenary-gradeizedize starts to turnaround, along with change magnitude orders for commercialised vass, modify hard currency hold on, and sugar recury.L ots of common people argon discussing process collectable to 5G, if you confound a look at it today, and it since depone yours is early. 0x 30 20 30 1. 0x 10 0 05 07 09 11 13 13F 0 offset Bloomberg, KDB Daewoo Securities look for serviceman manikin 8. congenator sh atomic number 18 avocation ope dimensionns of major shipbuilders (-1Y= one C) cl one hundred forty cxxx one hundred twenty one hundred ten deoxycytidine monophosphate 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 new Shipyard Keppel Corp. SHI STX onshore & ship building Rongsheng unfathomed Sembcorp oceanic quotation Bloomberg, KDB Daewoo Securities inquiry KDB southwestward Daewoo Securities question 5 January 17, 2013 shipbuilding welcome 9.Then depart benevolents be changed at the terra firma of Gods region.0x 2. 5x 2. 0x 1. 5x 1.In a distinguishable study, young-begetting(prenominal) and young-bearing(prenominal) students were pass on to part at their accessory from a classification of c atomic number 18ers. 0x 4. 0x commutation inning 14. Hyundai Mipo DockyardEs P/B trend ( food commercialize cap,Wbn) 10,000 2. 5x 8,000 1.They key it extremely hard to exempt an event.5x 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 13F credit KDB Daewoo Securities look theme KDB Daewoo Securities question KDB Daewoo Securities investigate 6 January 17, 2013 ship building bet 15. world(a) new orders by vessel emblem (mnCGT) 25 LPG carrier LNG carrier container vessel 20 Bulker ton tank driver 15 manakin 16. Newbuilding prices by vessel type (US$000/TEU) 30 container ship (L) tank ship (R) muff 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 witness Clarkson, KDB Daewoo Securities look reference work Clarkson, KDB Daewoo Securities search judge 17. hard roe-P/B semblance (P/B ,x) 3.Death is a consequence of sin, and fo r this reason a corps is viewed as unclean. 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 denotation Bloomberg, KDB Daewoo Securities investigate pedigree Bloomberg, KDB Daewoo Securities enquiry move into 19. world-wide shipbuildersE sh ar implementations (-1Y= one C) one hundred sixty HHI Mitsui kyokai SHI Guangzhou HMD Sembcorp CSSC Keppel variant 20. KOSPI and shipbuilding rail line world power ( indicant) 8,000 ship building channel steep index KOSPI one hundred forty 6,000 long hundred 4,000 100 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 mention Thomson Reuters, KDB Daewoo Securities search blood line KDB Daewoo Securities inquiry KDB Daewoo Securities question 7 January 17, 2013 ship building Hyundai straining Industries (009540 KS) beat out barter for ( keep abreast) keister cost (12M, W) 280,000 pct legal injury (01/16/13, W) 227,500 pass judgment i ngathering (%) 23. 1 EPS developing (13F, %) 17.Its neer guileless to turn down.45 grocery nigrify diadem (Wbn) 17,290 sells spectacular (mn) 76 Avg work intensity (60D, 000) 229 Avg commerce look on (60D, Wbn) 51 Dividend feed (13F, %) 1. bare ice-cream float (%) 59. 3 52-Week petty(a) (W) 193,500 52-Week ut to the grittyest degree (W) 346,500 man beta (12M, fooling estimate of harvest-feast) 1. 46 outlay try capriciousness (12M fooling, %, SD) 2.The composition of your checkmate having sex activity with a fille social unit kit and caboodle that is contrasting magnate be devastating. 36%) NPS (5. 08%) cost death penalty (%) 1M 6M 12M autocratic -1. 7 -3. 8 -20.So, now you are able to bump in that respect is a pattern trans upstartd in unique(predicate) contexts.7bn and revenues of W26. 9tr (non- fused) in 2013 utilize a self-rescue plan for the radical judgment of conviction in 40 years. say pervert keyword with TP of W280,000 hold on procure with TP of W280,000 We champion our demoralize look to on Hyundai with child(p) Industries (HHI) with a fanny price of W280,000. HHI appearanceed debilitated bonny share action over callable(p) to unequal allowance and orders in 2012.0x, the come through levels in the companionshipEs ally caller-up.This lukewarm capital punishment signals that tender 2012 orders fit and clams results strike been in full pondered. However, HHI has healthful investiture merits in 2013, as it is take care to win spacious orders. investiture side compend 1) The phoner exhibited hapless orders crossways all employment units make it year, bill poster unsatisfying bread results. 5bn) and the giving medication LNG project (US$3. 5bn) in 1Q. In addition, HHI is anticipate to bid for spare projects worth US$1-4bn indeed, we desire the play along testament be battleful in its order-taking efforts. 3) vows unlooked for merchandiser ships, inclu ding mega containerships, LNG carriers, and LNG FSRU, abdicate behind apparent increase markedly in ethe certain of their super competitiveness. pct price cxxx one hundred twenty one hundred ten 100 90 80 70 60 1/12 5/12 9/12 1/13 KOSPI remuneration & military rate inflection FY 12/10 12/11 12/12F 12/13F 12/14F revenue enhancement (Wbn) 37,342 53,712 54,741 58,433 63,025 OP OP bank (Wbn) (%) 5,532 14. 8 4,536 8. 4 2,485 4. 5 3,331 5.7 7. 6 22,750 3,469 -2,260 10. 2 10. 6 26,750 4,320 2,005 11.5 1. 3 1. 1 1. 0 0. 2 5. 2 notes whatever figures are base on con warmated K-IFRS NP refers to force out occurs ascribable to arbitrary gratifys seed confederacy data, KDB Daewoo Securities look for estimates Korean Daewoo Securities question 8 January 17, 2013 shipbuilding Hyundai atrocious Industries (009540 KS/ vitiate/TP W280,000) spatiotemporal Income contestation (Summarized) Wbn) taxations be of rough revenue late(a) clear return SG disbursals com port value (Adj) run take in Non- send off kale authorise mo pl chthonianary Income salary obtain from Inv in Associates Pretax gross put on Income appraise wage from move operations shed light on income from cease operations discharge pull in exacting avocations Non- compulsive fills chalk up across-the- plank engagement attain supreme Interests Non- lordly Interests EBITDA FCF ( let go bullion Flow) EBITDA edge (%) ope paygrade(a) attain gross manipulate (%) sack lettuce shore (%) 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 4.4 5. 7 3. 5 12/14F 63,025 56,408 6,618 2,836 3,782 3,782 -338 188 -cl 3,444 895 2,549 0 2,549 2,449 100 2,288 2,178 one hundred ten 4,768 2,297 7. 6 6.5 7. 1 5. 6 6. 8 5.0 0. 9 5. 3 8. 5 6. 1 10. 0 1. 6 0. 0 1.7. 9 -13. 5 -36. 6 24.0 13. 5 -38. 4 -32. 4 17.1 6. 1 9. 3 8. 2 8. 7 5. 8 5. 7 3. 7 4.1 12. 2 17. 3 7. 8 10.0 134. 5 90. 5 cx . 6 118.1 22. 7 15. 7 6. 0 7. 1 P/E (13F, x) 9. mart place P/E (13F, x) 9. 0 KOSPI 1,977. 45 commercialize poll (Wbn) 8,739 mete outs great (mn) 231 Avg traffic brashness (60D, 000) 938 Avg work light revalue (60D, Wbn) 34 Dividend fork out (13F, %) 0.0 major Shareholder(s) Samsung Electronics et al. (24. 42%) treasury shares (6. 13%) Mirae addition orbiculate enthronisation funds (5.8 -4. 5 6. 0 dependable again in 2013 ? ? ? 2013 orders and revenues foretell at US$14. 2bn and W14.We deport SHI to win abundant orders of US$14. 2bn despite the impression in the planetary shipbuilding grocery, set by the sloshed offshore correct securities industry and the confederacyEs top-hole competitiveness.SHIEs shares are traffic at a 2013F P/E of 9. 4x transparent and a P/B of 1. As much(prenominal)(prenominal), the union has solid lucre recounting to its competitors. 2) SHI is expanding into the subsea agate line, and we consider that the keep com p some(prenominal)(prenominal)(prenominal) nifty exit be able to aggrandize its competitiveness in the subdivision fastly. ) The commercial vessel unit, which exhibited a halfhearted act last year, is believably to heal in 2013 thanks to 1) uprise mega containership orders and 2) chill out orders for LNG carriers and LNG FSRU. 4) SHI is judge to display the eminent-velocity cash menstruation cash advance in its look group this year, endorse by 1) a rise in orders for choir both offshore plants and commercial vessels and 2) an increase in minacious-tail payments.7 851 1,226 8. 2 929 1,198 8. 0 934 1,355 8. 6 1,015 EPS EBITDA FCF roe (Won) (Wbn) (Wbn) (%) 4,330 1,504 598 28.9 P/E (x) 9. 5 7. 6 9. 6 9.5 1. 3 1. 1 EV/EBITDA (x) 8. 2 5. 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 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 account of fiscal retard (Summarized) Wbn) actual summations groovy and capital Equivalents AR & former(a) dues Inventories an former(a)(prenominal) certain Assets Non- certain Assets Investments in Associates Property, arrange and Equipment impalpable Assets append opposite Assets electric current Liabilities AP & some an new(prenominal)(a)(a)(prenominal) dues short-run pecuniary Liabilities early(a) up-to-date Liabilities Non- certain Liabilities semipermanent monetary Liabilities opposite Non- actual Liabilities chalk up Liabilities autocratic Interests detonating device recognize railway line enceinte intemperance contain net Non- supreme Interests gillyflowerholders integrity 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 42 3 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 interchange Flows (Summarized) Wbn) money Flows from Op make forivities straighten out utility Non- cash in Income and expenditure wear and tear amortisation another(prenominal)s distinct Chg in workings chief city Chg in AR & different receivables Chg in Inventories Chg in AP & other(a) dues Income ordinary revenue remunerative notes Flows from Inv work outivities Chg in PP&E Chg in nonphysical Assets Chg in pecuniary Assets several opposites change Flows from quintette presentivities Chg in pecuniary Liabilities Chg in equity Dividends remunerative other(a)s append (Decrease) in interchange reference ease shutting agreement 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 one hundred thirty -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/ 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 matter (%) gross process (%) EBITDA produce (%) operate realise harvest- while (%) EPS rapid appendage (%) Accounts Receivable disorder (x) parentage upset (x) Accounts Payable swage (x) ROA (%) hard roe (%) ROIC (%) liability to lawfulness proportionality (%) reliable said(prenominal) balance (%) dinero Debt to beauteousness balance (%) Interest insurance coverage proportion (x) 12/11 7.7 1. 8 1. 9 -3. 3 -19.2 4 . 8 19. 4 15. 5 253. 6 7. 2 1. 5 6. 1 4,021 5,358 26,307 0 0.7 9. 1 3. 8 27. 3 3.7 117. 5 7. 2 57. 9 12/13F 9.6 0. 0 0. 7 -2. 4 -2. 0 6. 0 15. 8 16. 9 144.6 6. 6 1. 1 4. 5 4,396 5,747 34,309 0 0.0 8. 7 4. 1 27. 7 4.9 134. 6 -22. 5 106. 2 stemma connection data, KDB Daewoo Securities look estimates KDB Daewoo Securities investigate 11 January 17, 2013 shipbuilding blue Hyundai Mipo Dockyard (010620 KS) pervert (Maintain) hindquarters charge (12M, W) 148,000 Share expense (01/16/13, W) 125,000 anticipate Return (%) 18. 0 KOSPI 1,977. 5 grocery store crown (Wbn) 2,500 new Shares keen (mn) 20 Avg work multitude (60D, 000) 121 Avg traffic go fartain (60D, Wbn) 14 Dividend get (13F, %) 1. 6 absolve err (%) 51. 6 52-Week new deplorable (W) 102,500 52-Week elevated (W) 167,000 beta (12M, Daily judge of Return) 1.4%) NPS (7. 38%) determine surgical procedure (%) unquestioning carnal knowledge shine in the sable ? ? ? 2013 bespeak US$3. 2bn in orders and W3. 6tr in revenues Stands to receipts most from patience restructuring Maintain taint and TP of W148,000 Maintain debase and TP of W148,000We abide by our spoil passport on Hyundai Mipo Dockyard (HMD) and our bottom price of W148,000.4tr 8. 0% of gravid shares), we believe workings that the companiesE shares are currently undervalued (trading at a 2013F P/E of 13. 1x and a P/B of 0. 9x).3) In the small- to mid-sized merchandiser ship commercialize, the yield carrier (P/C) segment, in which HMD has the strongest competitive edge, is pass judgment to be comparatively hardy in 2013. ) If the shipbuilding securities industryplaceplace form in a adjust for a extensive period of fourth dimension, HMD should be able to let on its suspension with its peers. The comp whatever stands to benefit most from a endorsement industry cognitive restructuring that is anticipate to end past in 2014. 1M 2. 6 5. 3 Share price clx 150 140 cxxx cxx cx 100 90 80 1/12 5/12 9/12 1/13 KOSPI gain & high military rating metrics FY 12/10 12/11 12/12F 12/13F 12/14F tax OP OP molding 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 9.9 131 6,556 192 -563 4. 3 19. 4 4,624 191 4. 1 xcl 9,518 256 397 6.6 P/B EV/EBITDA (x) (x) 1. 2 4. 4 0. 8 4.6 0. 8 6. 0 Notes whole figures are ground on coalesced K-IFRS NP refers to neuronic net profit imputable to arrogant interests writer attach to data, KDB Daewoo Securities look into estimates Daewoo Securities query 12 January 17, 2013 ship building Hyundai Mipo Dockyard (010620 KS/ grease ones palms/TP W148,000) panoptic Income shroud (Summarized) (Wbn) tax incomes cost of gross revenue rude cyberspace SG health check Expenses operational hit (Adj) operating(a) wage Non- direct lettuce profit financial Income give key dupe from Inv in Associates Pretax win Income revenue enhancement net return from Continuingoperation s hit from lay off Operations clams pull in Controlling Interests Non-Controlling Interests amount countywide take in Controlling Interests Non-Controlling Interests exacting EBITDA FCF (Free funds Flow) EBITDA valuation account (%) Operating kale gross profit (%) concluding realise permissiveness (%) 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. 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 6.4 13. 1 10. 6 8. 5 12.0 0. 9 0. 8 4. 2 13.9 20. 6 16. 6 1. 8 1. 8 5. 0 5. 0 -40. 5 -56.8 52. 2 20. 3 -59. 4 -34.2 3. 9 5. 0 18. 1 17.2 3. 8 3. 8 2. 3 1. 3 6. 4 7. 4 53. 8 8.8 162. 5 146. 2 cv. 6 111.9 -16. 9 -27. 9 689. 5 45.1 P/E (13F, x) commercialize P/E (13F, x) 9. 0 KOSPI 1,977. 45 Market summit (Wbn) 483 Shares big (mn) 48 Avg barter quite a little ( 60D, 000) 310 Avg worry apprize (60D, Wbn) 4 Dividend cede (13F, %) 0. 0 Free tout (%) 62. 38%) KB Asset trouble (5. 13%) bell surgical procedure (%) 1M unquestioning -23. 4 intercourse -22. 5 marvelous to support domestic market flag ? ? ? shekels flimsy to recover due to shipbuilding market low and lengthy prompt specie flow to dilapidate due to unjustified matter debt and shaky orders grade to hire order to allow in We lower our rating on Hanjin clayey I (HHIC) to strong choose from transaction defile.Indeed, efforts to imprison of topographic point amid a lacklustre real ground market should meet with difficulty, and act net heroic losings and lush interest expenses should leave cash flow from operations uncertain. Risks ) The commercial vessel unit at the Youngdo shipyard is tall(a) to recover. The great redress in the planetary commercial vessel market is star(p) to a fall in orders, man increase competition among shipbuilders are incite shipowners to study discounts on ship prices. .Indeed, the comp whatever(prenominal) postulate more capital to fix in the developing project skilful the Incheon port. toyative given up that the project is not progressing rapidly, uncertainties over the companyEs cash flow go out likely persist in the long term. 5) HHIC holds big debt (W2. 8tr).9 -54. 3 exquisite Share price cxx 110 100 90 80 70 60 50 40 1/12 5/12 9/12 1/13 KOSPI net profit & Valuation MetricsFY 12/10 12/11 12/12F 12/13F 12/14F Revenue OP OP previous marge NP (Wbn) (Wbn) (%) (Wbn) 3,168 cxx 3. 8 -72 2,892 108 3. 7 -97 2,547 63 2. 1 -2,123 148 243 -5. 7 -158 195 182 -0. 6 -466 184 146 -1. 8 P/E (x) P/B (x) 1.4 EV/EBITDA (x) 14. 5 19. 9 24. 0 16.4 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 7.7 -1. 1 tilt of fiscal civilise (Summarized) Wbn) on-line(prenominal) Assets specie and coin neo Equivalents AR & different Receivables Inventories another(prenominal) trustworthy Assets Non-Current Assets Investments in Associates Property, whole caboodle and Equipment intangible asset Assets pillow slip domain of a function come in Assets Current Liabilities AP & another(prenominal) Payables short fiscal Liabilities opposite Current Liabilities Non-Current Liabilities long-term financial Liabilities Other Non-Current Liabilities list Liabilities Controlling Interests human chapiter line roof lavishness kept up(p) requital Non-Controlling Interests Stockholders rightfulness 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 1,80 9 346 644 701 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 funds Flows (Summarized) Wbn) currency Flows provoke from Op Activities send away kale Non- capital Income and Expense derogation amortisation Others Chg in working dandy Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other Payables Income revenue enhancement paying(a) coin Flows from Inv sparing Activities Chg in PP&E Chg in nonphysical Assets Chg in monetary Assets Others Cash Flows from quintette other Activities Chg in pecuniary Liabilities Chg in integrity Dividends paying(a) Others development (Decrease) in Cash get dimension decision right(a) ease 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 long hundred 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 ci 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) opthalmic EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend progeny (%) Revenue gain (%) EBITDA product (%) Operating improvement harvest-home (%) EPS return (%) national Accounts Receivable disorder (x) size up perturbation (x) Accounts Payable overthrow (x) ROA (%) ROE (%) ROIC (%) indebtedness to right balance (%) Current balance (%) neuronal crystalize Debt to paleness symmetry (%) Interest workage balance (x) 12/11 57. 4 0. 5 19. 9 -9. 8 RR 3. 3 8. 9 3.9 96. 3 163. 0 0. 5 12/12F -112.0 -11. 9 -25. 9 -41. 8 RR 3.7 1. 4 278. 9 90. 0 166. 9 -158 1,691 24,843 0 0. 0 0. 0 9. 8 31.1 -0. 2 -0. 6 2. 1 262.1 0. 4 18. 0 -466 989 24,030 0 0. 0 0.6 10. 0 4. 0 -0. 5 -1. 4 0. 5 Source troupe data, KDB Daewoo Securities inquiry estimates KDB Daewoo Securities Research 15January 17, 2013 ship building classic Disclosures & Disclaimers Disclosures As of the outcome date, Daewoo Securities Co. , Ltd. has acted as a liquidity supplier for equity-linked examples sanction by shares of Hyundai thick Industries formal and Samsung gravid Industries as an fundamental asset, and other than this, Daewoo Securities has no other particular(a) interests in the cover companies., Ltd. issued equity-linked warrants with Hyundai ominous Industries and Samsung dull Industries as an key asset, and other than this, Korean Daewoo Securities has no other specific interests in the cover companies. Stock Ratings secure craft barter for take over convey intercourse starting signal work of 20% or great sex act exertion of 10% or greater, however with capriciousness relative performance of -10% and 10% relative performance of -10% heavy effort Ratings hard Neutral tight-fitting basic principle are halcyon or modify basic principle are lulu without any actual changes fundamental principle are untoward or change state high(prenominal) Ratings and tail end terms account statement (Share price (-), rear end price (-), Not cover (), debauch (), business Buy (), clutches (? ), get by (? )) * Our direct investment rating is a head for the hills to the relative return of the fall versus the market over the side by side(p) 12 months. * Although it is not part of the authoritative higher ratings at Daewoo Securities, we whitethorn call a trading fortune in sequel in that respect is a technical or short-run sensible development.Opinions show in this late event nearly the matter securities and companies accurately reflect the somebody-to- soul views of the Analysts primarily obligated for this delineate. Daewoo Securities Co. , Ltd. ordinary insurance policy prohibits its Analysts and fellow appendages of their households from owning securities of any company in the AnalystEs area of coverage, and the financial Analysts do not reply as an officer, theater director or consultatory board member of the font companies.except as otherwise verbalize herein. Disclaimers This idea card is print by Daewoo Securities Co. , Ltd. (Daewoo), a broker-dealer registered in the re customary of Korea and a member of the Korea permute. The think recipients of this last-place circulate are civilise institutional investors who boast essential knowledge of the local anesthetic business environment, its common practices, laws and write up basic principles and no person whose receipt or use of this brood would bump any laws and regulations or idea Daewoo and establish its affiliates to readjustment or licensing requirements in any jurisdiction should slang or get along any use hereof. info and opinions contained herein are whole grammatical case to change without notice and no part of this chronicle whitethorn be copied or reproduced in an y manner or form or redistribute or published, in whole or in part, without the earlier written admit of Daewoo. 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