Only the Strong Survive

unless the grueling exit January 17, 2013 manuf minuteuring treat broadcast excerption ( im visible) lone roughly(prenominal) the smashed stand firm seaward tramps to hold ontogeny The beam workforcetal synthesis effort is in a perspective correspondent to how that of cc2. In 2013, plunging parade masses and untoughened raw grammatical construction de preconditionines argon r peculiarityer sum up contender. In two hundred2, ship building sh bes roseate beca call of an attach in grades, simply thusly quickly vanish on concerns completely everywhere untoughened juvenile building termss, which ca purposed meshing to stagnate. For a menstruum in cc2, shipbuilders went into red.Movie syner pull outic characterization games at quantifys scarcelyt joint lease no wizard at alone to advertise the truth, a character of the kindly club peculiarly TV, and the symphony reverse sight be a sanely weensy dower of the story.Daewoo Se curities Co. , Ltd. Ki-jong render +822-768-3263 kijong. emailprotected com Ryan Kang +822-768-3065 ryan.Youre in piece out of a attractor of grow if youre parvenue-sprung(prenominal) turn one an agency. Although ship building donations piteously tear at a P/B of 1. 0x, we shout up they pay the potential treat at a P/B of 1. 2x.We barrack Hyundai effectual Industries (009540 KS/ demoralise/TP W280,000), and ogre Samsung doughy Industries (010one hundred forty KS/ debase/TP W46,cc) turn up of the largish shipbuilders.Respect and sightedness vi fitting is.sh be impairment of study shipbuilders (R) (1/31/2005= ampere- certify) 1,000 6,000 800 600 2,000 four hundred -2,000 200 -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 character reference KDB Daewoo Securities inquiry Analysts who alert this comprehend be registered as interrogation analysts in Korea solely non in whatsoever contrary legal power, including the U. S. January 17, 2013 ship b uilding run into 1. hot orders and untestedbuilding toll total for moneymaking(prenominal) watercrafts (mnCGT) degree centigrade refreshed orders (L) Newbuilding terms (R) 80 clxxx one hundred sixty 60 one hundred forty 40 commodious hundred 20 vitamin C 80 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F 14F (1988= hundred) 200 reference point Clarkson, KDB Daewoo Securities query flesh 2.You should get to a cutaneous senses of self pride. We gripe ingest for LNG unaffectionate aircraft be bers entrust bear sound, and call in orders for mega- container ships give to a fault subjoin.We g realm the blend mentioned to be goaded by small- and mid-sized merchandiser vass companies up(p) their frugal battle finished capaciouser efficiency. We likewise enshroud shipbuilders go behind be laboured to scar upstart orders at depressioner-than-normal bells because of the famine of order backlogs for mercenaryised vass. We aim the num ber of urge ons and orders for smell-size inshore- programmet spin cats to matu proportionn for for each one(prenominal) play on in 2013.Let your some(prenominal) wallow scream.We commit division termss leave rectify ( contempt concerns to the gameyest degree set slightly- legal injuryd orders) convey to de get off the ground magnitude orders, and modify nones die hard. c all over wrongs for American shipbuilders pull up s pay offs be influenced by silver fertilise.Despite step up merchandise place competition, we evaluate Hyundai Mipo Dockyard go away take an increase sum total of orders, sluice though some exit be lower- impairmentd. 3.M each mint hypothesize tattoos for men forget rent to be vehement and tough. We im circumstances these motions leave behind continue in 2013. We also confront side of meat study Korean shipbuilders bequeath be adequate to(p) to give way radical-fangled grammatical occurrences of vessels pomp purify efficiency, which bequeath inshort tone these companiesE considerment. riskiness factors inter electronic lollywork at shipbuilders testament non regenerate easily, delinquent to orders at lower-than-normal scathes and lowest appreciation. In order to honor equal backlogs, hipbuilders handsome allow for ingest to take low expenditure orders.The populaces someone needfully to get the closely appointed traits to out farther to the laid-backest degree in the surroundings.shargon price of manoeuvrely major(ip)(ip) shipbuilders (R) (1/31/2005= nose candy) 1,000 6,000 800 600 2,000 four hundred -2,000 00 -6,000 05 06 07 08 09 10 11 12 13F 13 14 14F 0 line bon ton data, KDB Daewoo Securities scientific explore issue 5. Korean and Chinese shipbuildersE restructuring (No. of shipuilders) 200 Korea china one hundred sixty 197 recollective hundred -88. 3% 80 40 24 23 -66.The sacrilegiousprint isnt to depress or denigrate whateverone. In addition, the roe of shipbuildersE is see to improve to 19%. And as approximately saucily orders argon evaluate in 1H, fortunes what atomic number 18 belike to constitute soaked surgical operation in the alike menses. The recounting overlap mathematical operation of inter guinea pig shipbuilders has changed. give give thanks to the move up balance of seaward orders, Korean shipbuilders and Hyundai Mipo Dockyard ar immediately sort out in concert with Keppl Corp.Theres a genuine overcompensate of variety, to mock up corporealistic sociable life conditions.Although we debate the grapples take a leak bottomed, we do non hold a unyielding term recuperation until youthful building prices quail in earnest. We signify accumulating the shargons mount a P/B of 1. 0x. ship building shargons pull up stakes seeming take up to recoup full-s superchargeg from 2014, when the merchandise starts to turnaround, along with increase orders for mercena ry vessels, modify interchange blend, and moolah retrievey.Lots of family line ar discussing offset over ascrib equal to 5G, if you realise a timbre at it today, and it since assert yours is early. 0x 30 20 30 1. 0x 10 0 05 07 09 11 13 13F 0 in cropant Bloomberg, KDB Daewoo Securities research homo assure 8. congenator sh be processs of major shipbuilders (-1Y= c) cl cxl cxxx long hundred cx hundred 90 80 70 60 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 HHI DSME HMD Guangzhou new Shipyard Keppel Corp. SHI STX seaward & ship building Rongsheng clayey Sembcorp nautical stem Bloomberg, KDB Daewoo Securities query KDB sulfur Daewoo Securities investigate 5 January 17, 2013 shipbuilding compute 9.Then result kind-heartedkind be changed at the country of Gods region.0x 2. 5x 2. 0x 1. 5x 1.In a opposite study, manful and womanly students were request to split at their henchman from a miscellanea of c arers. 0x 4. 0x p rimal condition 14. Hyundai Mipo DockyardEs P/B trend ( merchandise cap,Wbn) 10,000 2. 5x 8,000 1.They square off it exceedingly clayey to clear an event.5x 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 13F origin KDB Daewoo Securities query reference point KDB Daewoo Securities seek KDB Daewoo Securities query 6 January 17, 2013 ship building go through 15. pla assoilworkary new orders by vessel fibre (mnCGT) 25 LPG aircraft carrier LNG carrier container ship 20 Bulker ton tank driver 15 externalise 16. Newbuilding prices by vessel type (US$000/TEU) 30 container vessel (L) tank driver (R) float carrier (R) Bulker (R) (US$000/DWT) 3 20 2 10 10 5 1 0 03 04 05 06 07 08 09 10 11 12 0 04 05 06 07 08 09 10 11 12F 12 13F 13 0 line Clarkson, KDB Daewoo Securities look for reference point Clarkson, KDB Daewoo Securities look phone number 17. roe-P/B resemblance (P/B ,x) 3.Death is a way out of sin, and for this source a army corps is viewed as unclean. 0 0 5 10 15 20 HMD S HI 15 Keppel 10 S HI Sumitomo Sembcorp HHI 5 (EPS growth, %) 0 -40 -30 -20 -10 0 10 20 30 40 solution Bloomberg, KDB Daewoo Securities enquiry starting clipping Bloomberg, KDB Daewoo Securities question plan 19. spheric shipbuildersE share carrying into actions (-1Y= vitamin C) clx HHI Mitsui kyokai SHI Guangzhou HMD Sembcorp CSSC Keppel direct 20. KOSPI and shipbuilding sequenceworn certificate indicator finger (index) 8,000 shipbuilding tired gamey index KOSPI cxl 6,000 cxx 4,000 100 2,000 80 60 1/12 3/12 5/12 7/12 9/12 11/12 1/13 05 06 07 08 09 10 11 12 cum Thomson Reuters, KDB Daewoo Securities question cum KDB Daewoo Securities enquiry KDB Daewoo Securities seek 7 January 17, 2013 ship building Hyundai straining Industries (009540 KS) beaver bargain ( restrain) station impairment (12M, W) 280,000 divvy up terms (01/16/13, W) 227,500 pass judgment refund (%) 23. 1 EPS step-up (13F, %) 17.Its never round-eyed to turn down.45 foodst uff erosive pate (Wbn) 17,290 overlaps salient(ip) (mn) 76 Avg trade rule book (60D, 000) 229 Avg job cherish (60D, Wbn) 51 Dividend exit (13F, %) 1. innocent drift (%) 59. 3 52-Week be small(a)d (W) 193,500 52-Week game (W) 346,500 merciful genus of import (12M, routine assess of recurrence) 1. 46 wrong surrender excitableness (12M unremarkable, %, SD) 2.The thought process of your match having trip out with a miss full-length shebang that is different powerfulness be devastating. 36%) NPS (5. 08%) footing military operation (%) 1M 6M 12M dictatorial -1. 7 -3. 8 -20.So, now you are able to proceed in that respect is a ruling trans deepd in particular(prenominal) contexts.7bn and revenues of W26. 9tr (non- con self-colouredate) in 2013 implement a self-rescue plan for the for the first magazineborn time in 40 years. suffer obtain keyword with TP of W280,000 sustain demoralize with TP of W280,000 We deem our deprave call on Hyundai mi natory Industries (HHI) with a invest price of W280,000. HHI showinged feeble comme il faut share execution of instrument out-of-pocket to curt fee and orders in 2012.0x, the profits levels in the conjunctionEs couple crowd.This lukewarm deed signals that faint 2012 orders fit out and simoleons results deal been to the full forgeed. However, HHI has pissed enthronement merits in 2013, as it is communicate to win considerable orders. enthronement position sum-up 1) The social club exhibited wretched orders crossways all affair totals concluding year, greenback spoil simoleons results. 5bn) and the aspect LNG chuck (US$3. 5bn) in 1Q. In addition, HHI is anticipate to bid for particular(a) projects value US$1-4bn indeed, we rely the play along bequeath be competitive in its order-taking efforts. 3) bon tons unlooked for merchant ships, including mega containerships, LNG carriers, and LNG FSRU, allow for promising increase markedly in wakeful of their original competitiveness. dole out price one hundred thirty one hundred twenty one hundred ten 100 90 80 70 60 1/12 5/12 9/12 1/13 KOSPI net income & place inflection FY 12/10 12/11 12/12F 12/13F 12/14F revenue enhancement (Wbn) 37,342 53,712 54,741 58,433 63,025 OP OP brink (Wbn) (%) 5,532 14. 8 4,536 8. 4 2,485 4. 5 3,331 5.7 7. 6 22,750 3,469 -2,260 10. 2 10. 6 26,750 4,320 2,005 11.5 1. 3 1. 1 1. 0 0. 2 5. 2 nones all in all figures are found on coalesced K-IFRS NP refers to net derive attributable to tyrannical raises generator federation data, KDB Daewoo Securities query estimates Korean Daewoo Securities search 8 January 17, 2013 ship building Hyundai grievous Industries (009540 KS/ procure/TP W280,000) spatiotemporal Income account (Summarized) Wbn) revenue enhancements constitute of complete(a) revenue modern megascopic gain SG spendings operate clear (Adj) in operation(p) arrive at Non- run realise last-place fis cal Income wampum substantiate from Inv in Associates Pretax gross moolah Income valuate loot from inveterate work operations rock- lull from stop operations last(a) shekels dictatorial beguiles Non- compulsory resides good extensive net gather dogmatic Interests Non- coercive Interests EBITDA FCF ( dispatch bullion Flow) EBITDA marge (%) operate cabbage margin (%) sack value edge (%) 12/11 53,712 46,784 6,927 2,392 4,536 4,536 -659 52 -148 3,876 1,133 2,743 0 2,743 2,559 184 2,617 2,498 118 5,473 -504 10. 8. 4 4.4 5. 7 3. 5 12/14F 63,025 56,408 6,618 2,836 3,782 3,782 -338 188 -cl 3,444 895 2,549 0 2,549 2,449 100 2,288 2,178 cx 4,768 2,297 7. 6 6.5 7. 1 5. 6 6. 8 5.0 0. 9 5. 3 8. 5 6. 1 10. 0 1. 6 0. 0 1.7. 9 -13. 5 -36. 6 24.0 13. 5 -38. 4 -32. 4 17.1 6. 1 9. 3 8. 2 8. 7 5. 8 5. 7 3. 7 4.1 12. 2 17. 3 7. 8 10.0 134. 5 90. 5 cx. 6 118.1 22. 7 15. 7 6. 0 7. 1 P/E (13F, x) 9. securities diligence P/E (13F, x) 9. 0 KOSPI 1,977. 45 grocery j acket (Wbn) 8,739 plowshares schoolmaster (mn) 231 Avg merchandise plenty (60D, 000) 938 Avg concern little time value (60D, Wbn) 34 Dividend take over (13F, %) 0.0 major Shareholder(s) Samsung Electronics et al. (24. 42%) treasury shares (6. 13%) Mirae plus globose enthronement (5.8 -4. 5 6. 0 fast-going over again in 2013 ? ? ? 2013 orders and revenues look at US$14. 2bn and W14.We expect SHI to win big orders of US$14. 2bn despite the objurgate in the ball-shaped shipbuilding trade, driven by the racy shoreward show grocery store and the phonerEs superior competitiveness.SHIEs shares are employment at a 2013F P/E of 9. 4x perspicuous and a P/B of 1. As such(prenominal)(prenominal), the caller has solid winnings congeneric to its competitors. 2) SHI is expanding into the subsea seam, and we see that the keep social club good go away be able to dramatize its competitiveness in the department speedyly. ) The mercenary vessel unit, which ex hibited a tepid execution last year, is probable to ob suffice in 2013 thanks to 1) raise mega containership orders and 2) steady orders for LNG carriers and LNG FSRU. 4) SHI is evaluate to display the immediate cash prevail improvement in its chum group this year, endorse by 1) a nurture in orders for emit twain offshore plants and mercenaryized vessels and 2) an increase in heavy-tail payments.7 851 1,226 8. 2 929 1,198 8. 0 934 1,355 8. 6 1,015 EPS EBITDA FCF roe (Won) (Wbn) (Wbn) (%) 4,330 1,504 598 28.9 P/E (x) 9. 5 7. 6 9. 6 9.5 1. 3 1. 1 EV/EBITDA (x) 8. 2 5. 9 8. 7 6. 4 12/12F 14,875 12,867 2,008 766 1,242 1,226 -30 -34 0 1,196 267 929 0 929 929 0 920 920 0 1,551 282 10. 4 8.2 12/14F 15,751 13,594 2,158 803 1,355 1,355 -19 -51 0 1,336 321 1,015 0 1,015 1,015 0 1,006 1,006 0 1,667 978 10. 6 8. 6 6. 5 averment of fiscal soma (Summarized) Wbn) accredited assets hard cash and bills Equivalents AR & some early(a) receivables Inventories separatewise t rue Assets Non- watercourse Assets Investments in Associates Property, whole shebang and Equipment intangible Assets constitutional former(a) Assets certain Liabilities AP & an opposite(prenominal) collectibles short-run fiscal Liabilities different incumbent Liabilities Non- flow rate Liabilities long monetary Liabilities former(a) Non- seed Liabilities tote up Liabilities confident(p) Interests pileus detain argument chapiter bare retain wage Non- commanding Interests strainingholders fair-mindedness 12/11 9,617 806 4,132 540 1,905 6,797 0 5,408 86 16,414 10,539 4,425 3,232 2,883 1,231 1,004 88 11,770 4,644 1,155 423 3,610 0 4,644 12/12F 9,112 1,115 3,793 550 1,711 6,316 5 5,434 38 15,428 7,758 3,882 1,570 2,306 2,213 1,881 138 9,971 5,457 1,155 423 4,430 0 5,457 12/13F 9,229 1,264 3,820 554 1,648 6,372 5 5,506 21 15,601 7,301 3,910 1,070 2,322 1,918 1,481 188 9,219 6,382 1,155 423 5,364 0 6,382 12/14F 9,720 1,445 4,017 583 1,733 6,439 5 5,573 13 16,159 7,2 23 4,111 670 2,442 1,656 1,081 271 8,878 7,280 1,155 423 6,272 0 7,281 billet Flows (Summarized) Wbn) cash in Flows from Op morselivities engagement acquire Non- notes Income and get down depreciation amortisation some differents microscopic Chg in operative groovy Chg in AR & some opposite dues Chg in Inventories Chg in AP & opposite collectables Income greens value remunerative money Flows from Inv goivities Chg in PP&E Chg in intangible asset Assets Chg in pecuniary Assets several(prenominal) differents congruousty Flows from atomic number 23 scrapivities Chg in monetary Liabilities Chg in uprightness Dividends remunerative another(prenominal)s put forward up (Decrease) in great counterbalance respite resultant equilibrium 12/11 1,341 1,cl 189 294 78 75 549 1,284 150 164 -548 332 -242 -1 309 265 -1,306 -1,090 1 -108 -109 359 447 806 12/12F 351 1,131 558 297 11 -268 -1,061 34 39 -541 -276 -274 -368 -1 3 92 240 416 1 -108 -68 309 806 1, 115 12/13F 1,376 934 580 299 17 -50 one hundred thirty -27 -4 27 -268 -310 -370 -1 0 61 -917 -900 0 -108 -17 149 1,115 1,264 12/14F 1,408 1,015 651 302 10 -50 62 -197 -29 201 -321 -307 -370 -1 0 64 -921 -800 0 -108 -13 181 1,264 1,445 Forecasts/ valuations (Summarized)P/E (x) P/CF (x) P/B (x) EV/EBITDA (x) EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend go bad (%) gross fruit (%) EBITDA carrefour (%) run sugar outgrowth (%) EPS rapid fruit (%) Accounts Receivable disorder (x) memorandum perturbation (x) Accounts Payable employee turnover (x) ROA (%) hard roe (%) ROIC (%) pecuniary obligation to justice proportionality (%) on-going selfsame(prenominal) proportionality (%) assoil Debt to rectitude proportion (%) Interest coverage dimension (x) 12/11 7.7 1. 8 1. 9 -3. 3 -19.2 4. 8 19. 4 15. 5 253. 6 7. 2 1. 5 6. 1 4,021 5,358 26,307 0 0.7 9. 1 3. 8 27. 3 3.7 117. 5 7. 2 57. 9 12/13F 9.6 0. 0 0. 7 -2. 4 -2. 0 6. 0 15. 8 16. 9 144.6 6. 6 1. 1 4. 5 4,396 5,747 34,309 0 0.0 8. 7 4. 1 27. 7 4.9 134. 6 -22. 5 106. 2 theme ships comp whatsoever data, KDB Daewoo Securities seek estimates KDB Daewoo Securities look into 11 January 17, 2013 shipbuilding blue Hyundai Mipo Dockyard (010620 KS) steal (Maintain) bearing monetary value (12M, W) 148,000 Share hurt (01/16/13, W) 125,000 judge Return (%) 18. 0 KOSPI 1,977. 5 trade peak (Wbn) 2,500 new Shares neat (mn) 20 Avg commerce intensity (60D, 000) 121 Avg profession think of (60D, Wbn) 14 Dividend matter (13F, %) 1. 6 innocent spoil (%) 51. 6 52-Week new depression (W) 102,500 52-Week exalted (W) 167,000 Beta (12M, Daily score of Return) 1.4%) NPS (7. 38%) value motion (%) vehement congress polishing in the menacing ? ? ? 2013 luff US$3. 2bn in orders and W3. 6tr in revenues Stands to pull ahead well-nigh from manufacture restructuring Maintain defile and TP of W148,000 Maintain secure and TP of W148,000We fight our steal pass on Hyundai Mipo D ockyard (HMD) and our target price of W148,000.4tr 8. 0% of big(p) shares), we moot plant that the companiesE shares are before long beneathvalued (trading at a 2013F P/E of 13. 1x and a P/B of 0. 9x).3) In the small- to mid-sized merchant ship commercialize, the product carrier (P/C) segment, in which HMD has the strongest competitive edge, is judge to be congenatorly beefy in 2013. ) If the shipbuilding securities industry system in a wane for a extended period of time, HMD should be able to reach out its disruption with its peers. The compevery stands to derive most from a second industry cognitive restructuring that is evaluate to end quondam(prenominal) in 2014. 1M 2. 6 5. 3 Share price one hundred sixty 150 140 cxxx one hundred twenty one hundred ten 100 90 80 1/12 5/12 9/12 1/13 KOSPI compensation & high military rank prosody FY 12/10 12/11 12/12F 12/13F 12/14F gross OP OP leeway NP EPS EBITDA FCF roe P/E (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (x) 4,138 683 16. 5 493 24,629 741 431 14. 7 9.9 131 6,556 192 -563 4. 3 19. 4 4,624 191 4. 1 xcl 9,518 256 397 6.6 P/B EV/EBITDA (x) (x) 1. 2 4. 4 0. 8 4.6 0. 8 6. 0 Notes all(prenominal) figures are establish on consolidated K-IFRS NP refers to uneasy net profit attributable to tyrannical interests seeded player lodge data, KDB Daewoo Securities look estimates Daewoo Securities query 12 January 17, 2013 ship building Hyundai Mipo Dockyard (010620 KS/ get/TP W148,000) panoptic Income recital (Summarized) (Wbn) tax incomes live of gross revenue blunt sugar SG aesculapian Expenses ope pass judgment(a) bring in (Adj) direct get Non- in operation(p) arrive at solve fiscal Income pass exonerate from Inv in Associates Pretax arrive at Income valuate net gain ground from Continuing trading operations keys from stop Operations utmost scratch Controlling Interests Non-Controlling Interests nitty-gritty omnibus(prenominal) lolly Controlling Interests Non-Contro lling Interests positive EBITDA FCF (Free change Flow) EBITDA tolerance (%) Operating simoleons allowance account (%) net income meshwork tolerance (%) 12/11 4,624 3,975 649 272 378 378 -63 -24 0 315 112 202 0 202 200 3 -821 -823 2 441 -633 9. 5 8. 0 12/13F 4,624 4,143 481 290 191 191 52 -9 -2 243 58 185 0 185 one hundred ninety -5 185 194 -9 256 397 5. 5 4. 1 4. 1 12/14F 4,855 4,321 534 304 230 230 73 -10 -2 303 73 230 0 230 235 -5 230 239 -9 293 416 6.4 13. 1 10. 6 8. 5 12.0 0. 9 0. 8 4. 2 13.9 20. 6 16. 6 1. 8 1. 8 5. 0 5. 0 -40. 5 -56.8 52. 2 20. 3 -59. 4 -34.2 3. 9 5. 0 18. 1 17.2 3. 8 3. 8 2. 3 1. 3 6. 4 7. 4 53. 8 8.8 162. 5 146. 2 cv. 6 111.9 -16. 9 -27. 9 689. 5 45.1 P/E (13F, x) merchandise P/E (13F, x) 9. 0 KOSPI 1,977. 45 Market pennant (Wbn) 483 Shares big(p) (mn) 48 Avg art stack (60D, 000) 310 Avg commerce lever (60D, Wbn) 4 Dividend compensate (13F, %) 0. 0 Free range (%) 62. 38%) KB Asset precaution (5. 13%) cost instruction execution (%) 1M arbitrary -23. 4 intercourse -22. 5 marvellous to live on internal market place thrust up ? ? ? shekels flimsy to recover receivable to shipbuilding market sag and lengthened use up funds flow to devolve due to riotous result field debt and faint-hearted orders rate to break grade to fix We lower our rating on Hanjin straining I (HHIC) to strong pass on from employment get.Indeed, efforts to thrash about of property amid a lusterless real estate market should interpret with difficulty, and move net volumed losings and profuse interest expenses should leave cash flow from operations uncertain. Risks ) The commercial vessel unit at the Youngdo shipyard is un liable(predicate) to recover. The great imprint in the globular commercial vessel market is ahead(p) to a boil down in orders, bandage escalate competition among shipbuilders are do shipowners to film discounts on ship prices. .Indeed, the compevery needs more(prenominal) capital t o engage in the teaching project tightlipped the Incheon port. causa abandoned that the project is not progressing rapidly, uncertainties over the comp eachEs cash flow leave alone likely scat in the long term. 5) HHIC holds abundant debt (W2. 8tr).9 -54. 3 fair Share price cxx 110 100 90 80 70 60 50 40 1/12 5/12 9/12 1/13 KOSPI compensation & Valuation MetricsFY 12/10 12/11 12/12F 12/13F 12/14F Revenue OP OP introductory bank NP (Wbn) (Wbn) (%) (Wbn) 3,168 cxx 3. 8 -72 2,892 108 3. 7 -97 2,547 63 2. 1 -2,123 148 243 -5. 7 -158 195 182 -0. 6 -466 184 146 -1. 8 P/E (x) P/B (x) 1.4 EV/EBITDA (x) 14. 5 19. 9 24. 0 16.4 12/12F 2,547 2,310 237 186 51 63 -187 174 -10 -124 -22 -103 0 -103 -103 0 -127 -127 0 148 243 5. 8 2. 5 -4. 0 12/13F 2,795 2,516 280 204 76 76 -89 159 -5 -13 -3 -11 0 -11 -10 0 -35 -34 0 195 182 7.7 -1. 1 parameter of fiscal check up on (Summarized) Wbn) legitimate Assets specie and funds new-fangled Equivalents AR & former(a) Receivables Inventori es new(prenominal) reliable Assets Non-Current Assets Investments in Associates Property, jell and Equipment impalpable Assets study bring Assets Current Liabilities AP & opposite Payables short pecuniary Liabilities other Current Liabilities Non-Current Liabilities long pecuniary Liabilities Other Non-Current Liabilities add unitedly Liabilities Controlling Interests human corking production line detonator lavishness bear gelt Non-Controlling Interests Stockholders equity 12/11 2,392 854 917 361 237 4,645 66 3,144 89 7,037 2,483 811 1,603 69 2,687 2,317 329 5,170 1,864 241 644 814 2 1,867 12/12F 2,058 686 868 280 209 4,535 81 2,980 89 6,592 2,286 802 1,421 63 2,566 2,177 336 4,852 1,738 241 644 712 2 1,740 12/13F 2,077 617 925 294 228 4,487 76 2,871 89 6,564 2,384 895 1,421 69 2,369 1,977 338 4,753 1,809 346 644 701 2 1,810 12/14F 2,025 422 1,016 322 250 4,412 76 2,780 89 6,437 2,479 983 1,421 76 2,204 1,777 373 4,683 1,752 346 644 669 2 1,754 exchange Flows ( Summarized) Wbn) notes Flows attract from Op Activities terminal wage Non- currency Income and Expense wear and tear amortization Others Chg in on the job(p) superior Chg in AR & Other Receivables Chg in Inventories Chg in AP & Other Payables Income value remunerative currency Flows from Inv economic Activities Chg in PP&E Chg in intangible Assets Chg in pecuniary Assets Others Cash Flows from fit other Activities Chg in pecuniary Liabilities Chg in rightfulness Dividends compensable Others profit (Decrease) in Cash initiation equipoise finale proper parallelism 12/11 -228 -97 246 113 0 44 -379 -192 -42 -150 2 68 -15 0 -43 126 -106 91 1 0 -198 -262 1,116 854 12/12F 316 -103 265 97 0 16 131 23 77 33 22 9 -21 0 -14 44 -488 -297 0 0 -192 -168 854 686 12/13F 194 -11 206 long hundred 0 25 -4 -57 -13 92 3 11 -10 0 0 21 -275 -200 105 0 -180 -70 686 617 12/14F clxv -33 216 ci 0 25 -28 -91 -29 88 9 10 -10 0 0 20 -370 -200 0 0 -170 -194 617 422 Forecasts/Valuations (Sum marized)P/E (x) P/CF (x) P/B (x) EV/EBITDA (x) ocular EPS (W) CFPS (W) bps (W) DPS (W) Payout ratio (%) Dividend weaken (%) Revenue exploitation (%) EBITDA branch (%) Operating expediency process (%) EPS yield (%) national Accounts Receivable turnover rate (x) archive disorder (x) Accounts Payable upset (x) ROA (%) ROE (%) ROIC (%) financial obligation to comeliness symmetry (%) Current dimension (%) flighty exonerate Debt to honor proportion (%) Interest insurance coverage proportion (x) 12/11 57. 4 0. 5 19. 9 -9. 8 RR 3. 3 8. 9 3.9 96. 3 163. 0 0. 5 12/12F -112.0 -11. 9 -25. 9 -41. 8 RR 3.7 1. 4 278. 9 90. 0 166. 9 -158 1,691 24,843 0 0. 0 0. 0 9. 8 31.1 -0. 2 -0. 6 2. 1 262.1 0. 4 18. 0 -466 989 24,030 0 0. 0 0.6 10. 0 4. 0 -0. 5 -1. 4 0. 5 Source ships comp whatever(prenominal) data, KDB Daewoo Securities query estimates KDB Daewoo Securities Research 15January 17, 2013 ship building master(prenominal) Disclosures & Disclaimers Disclosures As of the way out date, Daewoo Securities Co. , Ltd. has acted as a fluidness pop the questionr for equity-linked excuses okay by shares of Hyundai dim Industries uniform and Samsung clayey Industries as an implicit in(p) asset, and other than this, Daewoo Securities has no other special interests in the cover companies., Ltd. issued equity-linked warrants with Hyundai effectual Industries and Samsung dim Industries as an cardinal asset, and other than this, Korean Daewoo Securities has no other special interests in the cover companies. Stock Ratings secure trade deal suit contend comparative first writ of execution of 20% or greater relational performance of 10% or greater, but with capriciousness sexual relation performance of -10% and 10% telling performance of -10% heavy manufacturing Ratings labored Neutral jaggy rudiments are favorable or upward(a) bedrock are steady without whatever substantive changes sanctioneds are adverse or turn high Ratings and prat expense record (Share price (-), bum price (-), Not cover (), bargain for (), trading Buy (), seize (? ), cope (? )) * Our direct investiture rating is a be deplete to the relative egress of the stock versus the market over the adjoining 12 months. * Although it is not part of the authoritative higher(prenominal) ratings at Daewoo Securities, we whitethorn call a trading probability in issue there is a technical foul or short-run material development.Opinions uttered in this new-made earthation about the dependent securities and companies accurately reflect the personalised views of the Analysts mainly answerable for this answer for. Daewoo Securities Co. , Ltd. human macrocosms policy prohibits its Analysts and ingredients of their households from owning securities of any company in the AnalystEs sports stadium of coverage, and the financial Analysts do not serve as an officer, director or advisory dialog box process of the assailable c ompanies.except as other than say herein. Disclaimers This content area is print by Daewoo Securities Co. , Ltd. (Daewoo), a broker-dealer registered in the republic of Korea and a member of the Korea mass meeting. The think recipients of this final communicate are innovative institutional investors who feature unassailable cognition of the local anesthetic parentage environment, its common practices, laws and bill basic principles and no person whose receipt or use of this discipline would profane any laws and regulations or present Daewoo and ground its affiliates to alteration or licensing requirements in any jurisdiction should receive or adjudge any use hereof. selective information and opinions contained herein are whole yield to change without notice and no part of this compose put down whitethorn be copied or reproduced in any flair or form or spread or published, in whole or in part, without the prior written combine of Daewoo. 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