Amid global commercial ship market showing a recovery sign, focused on fuel-efficiency, Korean shipbuilder stock prices are also experiencing a strong upcycle, however it is suggested that this is just a beginning.

Park Moo-Hyun, analyst from E*Trade Securities of Korea said, “The recent rises in shipbuilder stocks could be seen overwhelming due to not-fully-improved performance and valuation pressure however the shipbuilder stock rise is evidently just the beginning.”

The analyst said, “Fuel-saving effect of eco-ship starts to be verified.” And as medium-sized eco-design tanker delivered by Hyundai Mipo Dockyard proved fuel-improving effect, new order intakes sharply grew. In addition, Daewoo Shipbuilding & Marine Engineering commenced delivery of 18,000 teu Triple-E series from July. “Eco-ship investment will spread into larger vessels, such as ultra-large containership over 20,000 teu, VLCC and so on after the upcoming year,” he prospected.

Park commented, “Eco-ship cycle is expected to continue, over the next 10 years, at least,” and stressed, “It is very important to make a right judgment on direction of shipbuilding industry over a long haul.”

And the analyst said, “Shipbuilding industry is confronting an upcycle status again, based on eco-ship’s fuel-efficiency, and noted, “The current flow of shipbuilding is experiencing a compressed competition structure. Chinese shipbuilding industry is moving its step into offshore industry, getting out of eco-ship building competition. Differentiation will appear in Korean shipbuilding industry as well. Hyundai Mipo and Daewoo will be the most beneficiaries of this eco-ship cycle since these builders are focusing on commercial ship and fuel-efficiency.”