[THE INVESTOR] Hanjin Heavy Industries & Construction will need more time to improve its profitability, said Shinyoung Securities on May 24, downgrading the recommendation to a “hold” from “buy” and did not suggest a target price. 

Its revenue in the first quarter declined 12 percent on-year to 503.3 billion won (US$465.93 million) and although operating profit came in at 21.6 billion won, it was from selling real estate in Incheon. Its shipyard in Philippines can build 15 mid- to large-sized vessels a year but as of March the order backlog was only 14 commercial vessels. It is seeking to attract foreign investment but will need more time, said analyst Eom Gyeong-a.

Hanjin Heavy’s revenue this year will drop 30.8 percent from last year to 1.70 trillion won and considering the market conditions, it will not be easy to turn around, she noted. 

By Hwang You-mee (glamazon@heraldcorp.com)