Hyundai Heavy Industries Holdings: Valuation and Dividend Merits Intact
Maintain BUY; Raise target price to KRW67,000
We raise our 12m fwd TP for HHIH by 11.7% from KRW60,000 (post-stock split basis) to KRW67,000 (12m fwd BVPS x 0.73x target P/B). Our TP was bumped up to reflect upward revisions to earnings estimates (2021E/2022E NP attributable to controlling interests up 4.1%/4.3%), a change in market risk premium (5.93% for 2020→7.37% for 2021) and necessary adjustments to assumptions (e.g., risk-free rate, terminal growth rate) due to market rate changes. We maintain BUY as our new TP offers 17.8% upside (24.5% if dividends included) against the Apr 6 closing price.