---
endpoint: analytics
pattern: Capital Goods
status: done
latency_ms: 201002
conversation_id: c16f9b51-25f1-401c-bc83-eed99b00e8c9
citations: 10
created: 2026-05-31 21:14:07Z
---

# Is CLSA incrementally more positive/negative on HD Hyundai Heavy. If so, why?

## CLSA on HD Hyundai Heavy (329180 KS) — Stance Evolution

**Bottom line: CLSA's stance has held steady at the most-bullish end of their rating scale — not incrementally more positive, but emphatically reiterated.** Across four notes spanning May 11 to June 15, 2025, CLSA has kept HD HHI at **High-Conviction Outperform (HC O-PF)** with an unchanged **₩613,000 12-month target price**, repeatedly badging it as their **flagship / top pick** in Korean shipbuilding [1][2][9]. The implied upside has compressed only because the stock has rallied (+54% upside at ₩397k on 21 May → +43.4% at ₩427,500 on 16 June) [4][9], not because conviction has faded.

### Timeline of CLSA's commentary

| Date | Note | Rating / TP | Tone delta |
|---|---|---|---|
| 11 May 2025 | "Anchors aweigh — answering the call for US LNG and naval ship demand" (sector initiation) | **HC O-PF / ₩613,000** — flagship pick [1][2] | Initiation at top of rating scale |
| 21 May 2025 | "HD Hyundai Heavy — HC O-PF (Price check)" | **HC O-PF maintained / ₩613,000 (+54%)** [3][4] | Defended against share-price weakness; "added buying opportunity" |
| 26 May 2025 | "Korea shipbuilding (Marketing feedback)" | HD HHI = sector top pick [5][6] | Post-roadshow read-through: positive sentiment outweighed concerns |
| 15 Jun 2025 | "Korea shipbuilding (Domestic marketing feedback)" | **HC O-PF / ₩613,000 (+43.4%)** [7][8][9] | Reiterated; sector still Overweight |

### Why CLSA stays bullish

1. **Scale and product-portfolio breadth** — HD HHI is the world's largest shipbuilder and the leading producer of dual-fuel engines, LNG and very large ammonia carriers, with the widest exposure across each of the active narratives (decarbonisation, US LNG export terminals, US naval rearmament, China-to-Korea order transfer from US port fees) [1][2]. CLSA explicitly justifies the **0.7× EV/2026CL backlog** premium multiple (vs 0.4× for Samsung Heavy / Hanwha Ocean) on this scale + portfolio diversity — a 30% discount to HHI's 1.0× prior-cycle peak to reflect the HD HSHI spin [1].

2. **Investor positioning corroborates the call** — After 20+ investor meetings (May) and 15+ Korean long-only meetings (June), CLSA reports that **HD Hyundai group names (especially HD HHI) and Samsung Heavy** drew the most demand, while Hanwha Ocean was avoided on valuation [5][6][7]. Investors are "broadly overweight" the sector and expect stronger performance in 2H25 [7][8].

3. **Recent share-price wobble dismissed as technical, not fundamental** — On 21 May, after a 6% one-day drop, CLSA dedicated a standalone note to two perceived overhangs: (i) the KRX "investment caution stock" (ICS) designation and (ii) HD KSOE EB holders exercising and selling HHI shares. CLSA concluded **both are non-fundamental**: ICS designations historically see prices recover by termination (~10 trading days); and despite 22% of total exchangeable volume already being sold over the prior month, there was **no observable share-price impact** [3][4]. Conclusion: "Any near-term pullbacks would be added opportunities to accumulate" [3].

4. **Catalyst path mapped** — CLSA expects the LNGC and containership story to drive performance in 2H25, with US naval-vessel orders a 2026 catalyst [8]. Order flow from LNG export terminals and US Navy contracts is expected to "begin 2H25 and gather meaningfully in 1H26" (sector view in earlier marketing feedback) [6].

5. **Structural margin growth seen as outweighing headwinds** — Investor pushback around FX, plate-price/cost pressure and the declining Clarksons Newbuild Price Index is acknowledged but CLSA judges these "manageable relative [to] structural margin growth" [7][8].

### What's NOT improving

- **No target-price raise.** Despite the price rally between 21 May (₩397k implied) and 16 June (₩427,500), CLSA has not bumped the ₩613,000 target [4][9]. So in the strict sense of "incrementally more positive via TP/rating revision," the answer is **no** — they were already at the most-bullish end of the scale at initiation.

- **Risks remain unchanged and acknowledged:** (i) US naval-vessel narrative could disappoint if actual orders are smaller or if the bill allowing US naval vessels to be built overseas does not materialise; (ii) US LNG export-terminal openings could create LNG oversupply and trigger a sharp downturn in LNGC demand [10].

### Verdict

**CLSA is not incrementally MORE positive on HD Hyundai Heavy — they were already at maximum conviction at initiation in May and have repeatedly defended that call against share-price weakness and roadshow pushback.** What has changed is the *evidence base* supporting the unchanged thesis: investor sentiment has caught up with their view (positive feedback in two consecutive marketing trips), and the technical overhangs of late May have not damaged the fundamental case. The stance is best described as **firmly reiterated High-Conviction Outperform** rather than "more positive" — the implied upside is now narrower (+43% vs initial +54%) only because the share price has risen toward, not because the target has been cut.

---
**Sources**
[1] *Korea shipbuilding (Anchors aweigh — Answering the call for US LNG and naval ship demand)* — CLSA, 11 May 2025 — 607949990LinqAlpha.PDF
[2] *Korea shipbuilding (Anchors aweigh)* — CLSA, 11 May 2025 — 607949990LinqAlpha.PDF (Flagship stocks section)
[3] *HD Hyundai Heavy — HC O-PF (Price check)* — CLSA, 21 May 2025 — 607960163LinqAlpha.PDF
[4] *HD Hyundai Heavy — HC O-PF (Price check)* — CLSA, 21 May 2025 — 607960163LinqAlpha.PDF (cover-page TP table)
[5] *Korea shipbuilding (Marketing feedback)* — CLSA, 26 May 2025 — 607960544LinqAlpha.PDF
[6] *Korea shipbuilding (Marketing feedback)* — CLSA, 26 May 2025 — 607960544LinqAlpha.PDF (key takeaways)
[7] *Korea shipbuilding (Domestic marketing feedback)* — CLSA, 15 June 2025 — 607962023LinqAlpha.PDF
[8] *Korea shipbuilding (Domestic marketing feedback)* — CLSA, 15 June 2025 — 607962023LinqAlpha.PDF (sector O-WT bullets)
[9] *Korea shipbuilding (Domestic marketing feedback)* — CLSA, 15 June 2025 — 607962023LinqAlpha.PDF (coverage / TP table)
[10] *HD Hyundai Heavy — HC O-PF (Price check)* — CLSA, 21 May 2025 — 607960163LinqAlpha.PDF (Investment risks)

Authors throughout: Dong Cheol Shin (dong.cheol.shin@clsa.com) and Joshua Kim, CLSA Seoul — this is **CLSA-parent** coverage (Korea desk), not CLST.

## Citations

- [1] **607949990LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607949990LinqAlpha.PDF>
- [2] **607949990LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607949990LinqAlpha.PDF>
- [3] **607960163LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960163LinqAlpha.PDF>
- [4] **607960163LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960163LinqAlpha.PDF>
- [5] **607960544LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960544LinqAlpha.PDF>
- [6] **607960544LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960544LinqAlpha.PDF>
- [7] **607962023LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962023LinqAlpha.PDF>
- [8] **607962023LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962023LinqAlpha.PDF>
- [9] **607962023LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962023LinqAlpha.PDF>
- [10] **607960163LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960163LinqAlpha.PDF>

