"The Time to Buy Proactively" Hanwha Engine’s New Growth Driver: Four-Stroke Medium-Speed Engines... POSCO International Completes LNG Value Chain with North American Gas Fields [Stocktopia]

[Financial News] Here is a roundup of reports from major securities firms as of the morning of September 17.
Hanwha Engine, a maker of marine engines, was selected as the top pick among shipbuilding-equipment stocks after analysts said Hanwha Group’s artificial intelligence data center (AIDC) business could become a new source of demand for power-generation engines.
POSCO International was assessed to have completed a business structure spanning gas production to liquefied natural gas (LNG) exports and trading through its acquisition of a U.S. shale-gas field. Hyundai Mobis had its target price lowered to reflect slower sales caused by Hyundai Motor’s strike and high oil prices, as well as the won’s appreciation. Analysts nevertheless said expectations for growth in automotive-electronics components remain intact.
◆ Hanwha Engine (082740)— SK Securities / Researcher Han Seung-han
- Target price: 90,000 won (maintained) | Previous closing price: 48,050 won
- Investment rating: Buy (maintained)
SK Securities maintained its 90,000-won target price for Hanwha Engine, which makes marine engines, saying Hanwha Group’s AIDC and floating data center (FDC) businesses will create new demand for four-stroke medium-speed engines.
After signing a licensed production agreement for engines in the 10-megawatt (MW) class, Hanwha Engine is expected to supply power-generation engines from 2028 to North American data centers operated by Hanwha Energy. Data center engines are a new market in which the company has no delivery track record. The key point is that an affiliate will provide its first reference project.
Researcher Han Seung-han explained, "This is a favorable arrangement because demand from an affiliate will help the company build its first track record, allowing it to secure both a reference and long-term demand at the same time, despite having no existing track record."
Hanwha Engine currently has annual production capacity of about 900 MW. Given that data center operators typically require 250–400 MW, a single large project would consume that capacity, making additional expansion inevitable. Analysts believe such expansion could enable structural growth.
Researcher Han said, "The upside in the share price is already sufficient based solely on the existing two-stroke low-speed engines, so this is the time to buy proactively before the momentum from four-stroke medium-speed engines for AIDC projects takes hold." He named Hanwha Engine his top pick among shipbuilding-equipment stocks.※ Four-stroke medium-speed enginesThe main engines that directly propel large ships are slowly rotating two-stroke low-speed engines. Auxiliary engines that generate electricity on board rotate faster and are called four-stroke medium-speed engines. Because they are used for power generation, they can serve as power sources not only for ships but also for land-based power plants and data centers.※ Floating data center (FDC)A data center operated on a ship or structure floating at sea, with servers installed on board. It can be built in places where securing land and access to the power grid are difficult, and it can generate its own electricity by carrying power-generation engines.
◆ POSCO International (047050)— Hana Securities / Researcher Yoo Jae-seon
- Target price: 105,000 won (maintained) | Previous closing price: 54,800 won
- Investment rating: Buy (maintained)
Hana Securities maintained its 105,000-won target price for POSCO International, saying the acquisition of a shale-gas field owned by a U.S. subsidiary of Chord Energy would contribute immediately to earnings because the asset is already producing. The acquisition is valued at approximately $550 million, and analysts said its low production costs mean it can remain profitable even if gas prices fall.
Researcher Yoo Jae-seon explained, "The acquisition appears to have been possible at an attractive price because Henry Hub prices in the United States have remained weak throughout the year."
Through the acquisition, POSCO International now owns upstream gas-production assets in three countries. Researcher Yoo said, "Following Myanmar and Australia, we have secured upstream assets in the United States," adding, "Because the newly acquired assets can export gas in the form of liquefied natural gas (LNG), they will be highly useful assets that can be linked to trading." Analysts said the company could expand its business by bringing inexpensive U.S. gas into South Korea or trading on price differences between regions.※ Henry HubA trading point that serves as the benchmark for U.S. natural-gas prices. It is often much cheaper than the LNG prices paid by South Korea and Japan, so shipping gas produced in the United States to Asia can generate profit from the price difference.※ UpstreamThe production stage of the oil and gas business, involving the exploration for and extraction of underground resources. Refining, transportation, and sales are classified as downstream activities.
◆ Hyundai Mobis (012330)— Samsung Securities / Researcher Lim Eun-young
- Target price: 650,000 won (lowered 18.8%, from 800,000 won) | Previous closing price: 383,000 won
- Investment rating: Buy (maintained)
Samsung Securities lowered its target price for Hyundai Mobis to 650,000 won, reflecting slower sales at its major customer, Hyundai Motor, and the won’s sharp appreciation. Hyundai Motor is experiencing weaker demand for internal-combustion-engine vehicles as sales decline due to the impact of a strike in the second half of the year and high oil prices caused by the prolonged war. Analysts judged that this would also weigh on the performance of Hyundai Mobis, which supplies components.
However, Samsung Securities said it maintained its Buy rating because the actuators supplied by Hyundai Mobis account for 50–60% of the hardware cost of humanoid robots.
Researcher Lim Eun-young said, "This is a period in which concerns about pressure to lower component prices, following slower earnings at Hyundai Motor and Kia, coexist with expectations for growth in automotive-electronics component sales and profitability. It is important to see whether the profitability of key components improves in the second half of the year as customers settle their costs."
Although it lowered the target price, Samsung Securities viewed Hyundai Mobis’s automotive-electronics business positively over the medium to long term. Citing the R&D Tech Day held on September 15, Researcher Lim assessed that "Hyundai Mobis is evolving beyond sensors, communications semiconductors, and power semiconductors into a system-on-chip (SoC) company." She also said, "As Hyundai Motor and Kia’s software-defined vehicles (SDVs) advance, their reliance on Hyundai Mobis’s automotive-electronics systems is expected to increase."※ Software-defined vehicle (SDV)A vehicle whose functions can be changed and improved through software updates, much like a smartphone. Because its electronic devices are integrated and controlled as a single system, the role of the component companies that design these systems becomes more important.※ System-on-chip (SoC)A semiconductor that combines multiple functions on a single chip. Designing communications, control, and power semiconductors—which were previously purchased and used separately—into one vehicle-specific chip can reduce wasted performance and lower costs.※ ActuatorA component that receives electrical signals and creates physical movement. It serves as a robot’s joints and muscles and accounts for the largest share of manufacturing costs in a humanoid robot.

[email protected] Seong Min-seo Reporter