Shipbuilding and Defense, Attractiveness Highlighted After Adjustment… "Defensive Approach Effective"

[Financial News] Recently, the shipbuilding and defense sectors, which have undergone adjustments, have expanded their short-term declines. In the securities industry, it is evaluated that although profit-taking due to short-term surges and external uncertainties acted as burdens, considering the defensive nature and order momentum, it could be a buying opportunity in the medium to long term.
According to the Korea Exchange on the 13th, shipbuilding-related stocks such as Hanwha Ocean (-1.65%), HD Hyundai Heavy Industries (-7.73%), and HD Hyundai Mipo (-13.89%) all showed a downward trend from July 1 to 11. During the same period, defense-related stocks such as Hanwha Aerospace (-3.93%), Hyundai Rotem (-8.06%), and Korea Aerospace Industries (-4.34%) also fell sharply.
The background for the adjustment in the shipbuilding sector is pointed out as profit-taking due to short-term surges, along with exchange rate declines and tariff uncertainties. The securities industry interprets that despite the recent increase in global ship orders and the expansion of high-profit ship proportions, a breather market appeared due to the rapid rise in stock prices in a short period. Especially for stocks like HD Hyundai Mipo, which surged since the beginning of the year, the adjustment range was large. However, it is evaluated that the shipbuilding industry itself is solid, and as stable plate prices and high-profit orders centered on LNG carriers continue, the medium to long-term performance improvement trend is valid.
The defense sector also underwent adjustments due to short-term selling pressure and tariff uncertainties. As investment sentiment towards large export stocks weakened, defense stocks were also affected. Although the declines were significant for Hyundai Rotem and Korea Aerospace Industries, it is analyzed that defense has low economic sensitivity and continues to receive policy support and overseas order momentum, making it stable in the long term. The increase in defense budgets in the US and Europe, and the possibility of additional orders from the Middle East and Asia, are also cited as positive factors.
Experts advise that both shipbuilding and defense have become more attractive due to recent adjustments, and as policy and performance momentum are maintained, it is necessary to maintain weight as leading sectors while having a strategy for each stock. Although there is a supply-demand burden in the short term, it is evaluated that it can be used as a buying opportunity in the medium to long term.
A financial investment industry official said, "The sectors with the best performance momentum within KOSPI are existing leading sectors such as shipbuilding and defense," adding, "There is room for an increase as major performance announcements are scheduled this month."  

koreanbae@fnnews.com Bae Hangul Reporter