Nomura: South Korean shipbuilding stocks valuation may pull back in the second half of the year.

Nomura's Eon Hwang stated that the high valuation of South Korean shipbuilding stocks may experience a correction in the second half of the year. The analyst wrote in a report that expectations of winning more defense contracts and rising freight rates in the first half of the year were supporting valuations amidst the disruptions in shipping caused by the Suez Canal and the Strait of Hormuz. However, lower prices for new ships and easing tensions in the Middle East have led Nomura to adopt a cautious outlook for the second half of the year. Nomura downgraded its rating for Hyundai Heavy Industries from "Neutral" to "Sell" and slashed the target price by 33% to 350,000 Korean Won. The rating for its indirectly owned subsidiary, Hyundai Mipo Dockyard, was also downgraded from "Buy" to "Neutral" with a 33% reduction in the target price to 410,000 Korean Won. Hyundai Heavy Industries' stock price fell by 0.7% to 563,000 Korean Won, while Hyundai Mipo Dockyard's stock price dropped by 1.6% to 407,000 Korean Won.