Hanwha Engine (formerly HSD Engine), a subsidiary of South Korea’s Hanwha Group, is accelerating its development amid the “super cycle” of the shipbuilding market. Its performance this year has repeatedly set new historical highs, demonstrating strong growth momentum. By the end of July, the company’s stock price had risen nearly 93% compared to the beginning of the year, and its market capitalization is expected to surpass the 3 trillion KRW (approximately $2.16 billion or 15.5 billion RMB) mark, making it a focal point in the South Korean securities market.
On August 1, Hanwha Engine released its second-quarter earnings report for this year. The company achieved revenue of 388.7 billion KRW (approximately $280 million or 2 billion RMB), a year-on-year increase of 35.3%, and operating profit of 33.7 billion KRW (approximately $24.24 million or 175 million RMB), up 81.4% year-on-year.
In the first half of this year, Hanwha Engine recorded cumulative revenue of 705.8 billion KRW (approximately $508 million or 3.67 billion RMB), a 21.7% increase year-on-year, and operating profit of 56 billion KRW (approximately $40.29 million or 290 million RMB), up 47.4% year-on-year.
The South Korean securities market generally believes that Hanwha Engine is achieving simultaneous improvements in profitability and growth potential.
Particularly noteworthy is the company’s order intake performance. In the first half of this year, Hanwha Engine secured new orders totaling 1,617.9 billion KRW (approximately $1.164 billion or 8.38 billion RMB), a roughly 150% increase compared to the same period last year, setting a record high since its acquisition by Hanwha Group. Notably, this amount already accounts for 98% of the company’s total order intake for all of 2023 (1,653.7 billion KRW), and the outlook for orders in the second half of the year remains optimistic.
As of now, Hanwha Engine’s order backlog has reached 4,013.9 billion KRW (approximately $2.89 billion or 20.8 billion RMB), surpassing the 4 trillion KRW mark, providing strong support for mid- to long-term revenue and profit growth.
Industry insiders in South Korea noted that Hanwha Engine is not only expanding its revenue scale but also continuously improving profitability. In terms of quarterly operating profit margin, the company steadily increased from 5.2% in Q3 2024 to 5.6% in Q4, further rising to 7.0% in Q1 2025 and reaching 8.7% in Q2, demonstrating a clear upward trend.
Hanwha Engine’s stable performance growth has also elicited a positive response from the capital market. At the beginning of this year, its stock price was around 19,000 KRW (approximately 98.5 RMB) per share, but by August 1, it had risen to around 35,000 KRW (approximately 181.7 RMB) per share, even hitting a one-year high of 36,650 KRW (approximately 190 RMB) on July 31.
If the upward trend in the company’s stock price continues, its current market capitalization of approximately 2.8 trillion KRW is expected to soon surpass the 3 trillion KRW mark.
A South Korean shipbuilding industry insider stated, “Hanwha Engine has recently achieved stable results through profitability-oriented operational improvements. Its success in expanding its customer base in China is particularly notable, further enhancing its future growth potential.”
Hanwha Engine was acquired by Hanwha Group in February 2024. That year, it recorded revenue of 1,302.2 billion KRW (approximately $960 million or 6.832 billion RMB at the annual average exchange rate), a 40.7% year-on-year increase, and operating profit of 71.5 billion KRW (approximately $52.7 million or 375 million RMB), up 719.5% year-on-year. It also achieved a net profit of 79.1 billion KRW (approximately $58.3 million or 415 million RMB), turning a profit compared to the previous year’s loss.
This year, Hanwha Engine has continued its strong performance. In the first quarter, the company reported revenue of 318.2 billion KRW (approximately $228 million or 1.65 billion RMB), up 8.4% year-on-year, and operating profit of 22.3 billion KRW (approximately $16 million or 116 million RMB), a 15% increase year-on-year.
Hanwha Engine attributed its performance growth to the formal delivery of “normal profit” orders—projects secured at reasonable profit margins since 2022 have recently been completed and delivered, leading to lower cost ratios and improved operating profit margins.
Notably, Hanwha Engine has performed exceptionally well in the Chinese market, with orders from Chinese customers accounting for nearly half of its order backlog.
With an order backlog exceeding 20 billion RMB, Hanwha Engine is increasing investments in production facilities to ensure mid- to long-term production capacity. In February this year, the company announced plans to build new production facilities at its Changwon headquarters, with an investment of 80.2 billion KRW (approximately $55.7 million or 400 million RMB).
Hanwha Engine was renamed from HSD Engine. In February last year, Hanwha Group officially acquired a 32.8% stake in HSD Engine for approximately $180 million, becoming its largest shareholder and renaming it “Hanwha Engine Co.” This also marked Hanwha Group’s official entry into the marine engine business, often referred to as the “heart of ships.” Through vertical integration, Hanwha Group is building a comprehensive industrial chain in the shipbuilding sector, which is expected to further enhance its global competitiveness in the shipbuilding market.
