---
endpoint: analytics
pattern: 04 · Peer · valuation compare
status: done
latency_ms: 163763
conversation_id: b9b09dde-79ee-4636-ba5a-157a8af46355
citations: 0
created: 2026-05-31 17:10:15Z
---

# Rank the Korean shipbuilders on FY26 P/B vs ROE.

## Korean Shipbuilders — FY26 P/B vs ROE Ranking

Based on **CLSA's flagship sector deep-dive ("Anchors aweigh", 11-May-2025)** and the subsequent peer-comp update ("Marketing feedback", 26-May-2025), here is the ranking of CLSA-covered Korean shipbuilders on **FY26 (26CL) P/B and ROE**. The relevant decision metric is **implied earnings yield on book (ROE ÷ P/B)** — the higher the ratio, the more book-value compounding you receive per won of equity capital paid.

### CLSA estimates — FY26 (26CL)

| Rank | Company | Ticker | 26CL P/B (x) | 26CL ROE (%) | ROE/PB | CLSA Rec |
|------|---------|--------|--------------|--------------|--------|----------|
| **1** | **HD KSOE** (holdco) | 009540 KS | **1.3** | **23.6** | **18.2** | O-PF [1][4] |
| 2 | Samsung Heavy Industries (SHI) | 010140 KS | 2.6 | 19.6 | 7.5 | O-PF [1] |
| 3 | HD Hyundai Heavy (HD HHI) | 329180 KS | 4.4 | 25.9 | 5.9 | HC O-PF [1][5] |
| 4 | Hanwha Ocean | 042660 KS | 4.0 | 14.6 | 3.7 | HLD [1][3] |

Source: CLSA "Anchors aweigh" (11-May-2025), peer screen in order of CLSA preference [1].

### Interpretation

- **HD KSOE (009540 KS) is the standout** on the P/B vs ROE plane — a holdco trading at just **1.3x 26CL P/B for a 23.6% ROE** [4]. The discount reflects its NAV-discount conglomerate structure (66% NAV discount to its underlying assets — HD HHI 75%, HD HSHI 97%, HD Hyundai Mipo 42% stakes), but the embedded operating ROE is virtually identical to HD HHI's. This is CLSA's third-preferred name on absolute valuation but the clear winner on book-value efficiency.
- **SHI (010140 KS) is the cleanest pure-play trade-off** — **2.6x P/B / 19.6% ROE**, the only Korean shipbuilder still in mid-cycle PB range (1.5–3.5x) by CLSA's historical framework vs the 3.8–5.1x prior-peak band [6]. CLSA explicitly notes SHI is "in mid cycle" while HD HHI (4x) and Hanwha Ocean (3x → 4x) have already rerated into mid-range of the prior peak.
- **HD HHI (329180 KS) carries the highest ROE in the group (25.9%)** but the highest P/B at 4.4x [5]. CLSA flags upside under PB valuations only because the prior-cycle peak band reached 3.8–5.1x; absolute returns from here depend on whether the cycle pushes multiples to the upper bound. The high-conviction Outperform is on order momentum, not relative value.
- **Hanwha Ocean (042660 KS) is the relative-value laggard** — **4.0x P/B but only 14.6% ROE**, the lowest ROE in the Korean group [3]. CLSA rates it Hold; the stock has already had a 147% one-year return absorbing the LNG/naval upcycle thesis.

### Adding HD Hyundai Mipo (sell-side consensus, not CLSA-rated)

CLSA's 26-May "Marketing feedback" peer comp [2] (consensus-based, not CLSA estimates) adds **HD Hyundai Mipo (010620 KS) at 2.9x 26F P/B / 15.9% ROE** — ROE/PB of ~5.5, sitting between HD HHI and Hanwha Ocean on the efficiency-of-book metric. Note that the 26-May table uses slightly different numbers for the CLSA-covered names (HD HHI 4.5x / 22.5%; SHI 2.5x / 16.8%; HO 3.8x / 14.3%; HD KSOE 1.4x / 19.4%) because it blends consensus where CLSA estimates differ — the rank order (HD KSOE > SHI > HD HHI > Hanwha Ocean) is unchanged.

### Caveat on the PB framework

CLSA uses PB as its **secondary** valuation method for the sector given the cyclical nature of book value, and stress-tests against the 2007 cycle peak (3.8–5.1x 24M-fwd PB) and mid-cycle band (1.5–3.5x) [7]. By that lens HD HHI at 4.3x current is already mid-range of the prior peak, Hanwha Ocean at ~3x is mid-range, SHI at 2.1x is still mid-cycle, and HD KSOE at 1.3x is materially below cycle averages. The ROE/PB ranking is therefore reinforced by historical-cycle positioning.

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**Sources**

[1] Korea shipbuilding (Anchors aweigh: Answering the call for US LNG and naval ship demand) — CLSA (11-May-2025) — Korea shipbuilding coverage summary table — 607949990LinqAlpha.PDF
[2] Korea shipbuilding (Marketing feedback) — CLSA (26-May-2025) — Peer comps table—shipbuilders — 607960544LinqAlpha.PDF
[3] Anchors aweigh — Hanwha Ocean financial table (23A–27CL) — 607949990LinqAlpha.PDF
[4] Anchors aweigh — HD KSOE financial table (23A–27CL) — 607949990LinqAlpha.PDF
[5] Anchors aweigh — HD Hyundai Heavy financial table (23A–27CL) — 607949990LinqAlpha.PDF
[6] Anchors aweigh — HD KSOE SOTP valuation (Figure 138) — 607949990LinqAlpha.PDF
[7] Anchors aweigh — PB valuation framework / mid-cycle vs peak cycle commentary — 607949990LinqAlpha.PDF

