Once considered a “troublesome burden” for the Korea Development Bank (KDB), South Korea’s mid-sized shipbuilder DH Shipbuilding (formerly Daehan Shipbuilding) is set to make a strong debut in the capital market, transforming into a trillion-won “behemoth” amid the recovery of the shipbuilding industry.
Q1 Operating Profit Margin Hits 22.7%! DH Shipbuilding’s “Turnaround Miracle” Over 3 Years Since Acquisition
DH Shipbuilding is scheduled to list on the Korea Exchange (KOSPI) on August 1. The results of its initial public offering (IPO) public subscription, conducted from July 22 to 23, showed an oversubscription rate of 238.1 times for the public offering portion, attracting approximately KRW 178.608 trillion (about RMB 93 billion) in subscription deposits, reflecting strong market confidence in the company’s prospects.
The IPO price has been set at KRW 50,000 per share (about RMB 260). The fundraising scale is around KRW 500 billion (about RMB 2.6 billion), with a post-listing valuation expected to reach KRW 1.9263 trillion (about RMB 10 billion). The proceeds will primarily be used for upgrading eco-friendly ship technologies and expanding global order marketing efforts, further enhancing the company’s shipbuilding competitiveness and laying the foundation for sustainable growth.
Founded in 2007 and located in Haenam-gun, South Jeolla Province, DH Shipbuilding is a globally renowned mid-sized shipyard specializing in tankers, primarily constructing medium-sized product/chemical tankers, crude oil carriers, shuttle tankers, and container ships, among other vessel types.
After the 2008 global financial crisis, the former Daehan Shipbuilding was placed under court receivership due to poor management and entered a workout program during South Korea’s shipbuilding industry restructuring in 2009. Subsequently, its major shareholder KDB and creditor groups sought to sell the company but failed to find a buyer. In 2013, the company was placed under Daewoo Shipbuilding & Marine Engineering’s (DSME) management, achieving a turnaround with DSME’s support and exiting court receivership by the end of 2015.
However, in the following years, the company fell back into losses, reaching a state of complete capital erosion by 2021. In August 2022, South Korean private equity firm KH Investment Group (KHI) acquired the former Daehan Shipbuilding for KRW 200 billion (about USD 150 million) and renamed it DH Shipbuilding.
After KHI’s acquisition, DH Shipbuilding’s performance and financial condition improved rapidly. In 2023, the company recorded revenue of KRW 816.3 billion (about RMB 4.3 billion) and operating profit of KRW 35.9 billion (about RMB 187 million), with an operating margin of about 4.4%. Additionally, DH Shipbuilding’s total assets surged from KRW 135 billion (about RMB 700 million) in 2022 to KRW 171.4 billion (about RMB 900 million) in 2023.
In 2024, DH Shipbuilding achieved revenue of KRW 1.0746 trillion (about RMB 5.656 billion), up 32% year-on-year, and operating profit of KRW 158.2 billion (about RMB 830 million), up 340% year-on-year—the second-highest growth rate among South Korea’s mid-to-large shipbuilders, trailing only HD Korea Shipbuilding & Offshore Engineering. Meanwhile, its debt ratio improved significantly, dropping from 374% in 2023 to 198% in 2024.
South Korean securities analysts noted that DH Shipbuilding’s 2024 operating profit surged 48-fold compared to 2022, with an operating margin of 14.7%, up over 10 percentage points from 2023’s ~4.4%, ranking first among South Korean shipbuilders and demonstrating robust growth momentum—a solid foundation for its upcoming IPO.
Market analysts attribute DH Shipbuilding’s 2024 profit surge to two factors: first, the company cleared its backlog of low-priced orders ahead of larger South Korean shipbuilders; second, high-value-added eco-friendly ship orders secured in recent years entered the construction phase, driving earnings upward.
DH Shipbuilding stated that since KHI’s acquisition in September 2022 and the introduction of a “new management model,” cost-competitiveness initiatives played a pivotal role. Post-acquisition, the company focused on core vessel types under KHI’s value-driven strategy, adopting a selective order approach prioritizing high-margin contracts. In 2024, DH Shipbuilding captured ~14% of the global mid-sized tanker market, ranking first worldwide.
At the IPO press conference, DH Shipbuilding CEO Wang Sandong said: “Thanks to rising newbuilding orders and prices since 2021, our revenue surpassed KRW 1 trillion last year. By exiting non-core segments like bulk carriers and focusing on tankers, we achieved an operating margin exceeding 14%.”
In Q1 2024, DH Shipbuilding maintained strong growth, posting revenue of KRW 307.7 billion (about RMB 1.54 billion) and operating profit of KRW 69.7 billion (about RMB 350 million), with an exceptional operating margin of ~22.7%. Its current order backlog stands at ~KRW 3 trillion (about USD 2.2 billion/RMB 15.8 billion), covering ~3 years of workload, with full-capacity operations to meet delivery schedules.
Global Newbuilding Order Slump “No Cause for Concern”? DH Shipbuilding’s 2024 Orders Still Expected to Match Past Levels
However, the recent global newbuilding order downturn has raised concerns. Despite DH Shipbuilding’s backlog extending to 2027, new orders have declined noticeably. From 2022–2024, it averaged 10 new orders annually but secured only 2 in Q1 2024.
CEO Wang Sandong explained: “Since H2 2023, Chinese shipbuilders’ capacity expansion and U.S.-China tensions have made owners cautious, but we expect orders to rebound in H2.”
He added: “While our order intake appears sluggish due to geopolitical delays, underlying demand remains strong. We’re confident 2024 orders will match historical levels.”
Wang emphasized: “Despite superficial order declines, industry fundamentals remain solid. Over half of global crude tankers are >15 years old, and IMO’s decarbonization roadmap ensures long-term order growth. Owners view ships as 20+ year assets, and DH’s fuel-efficient, low-maintenance designs retain strong competitiveness.”
DH Shipbuilding plans to use IPO proceeds to strengthen competitiveness and ensure sustainable growth, prioritizing R&D center construction, green technology upgrades, and production automation to boost profitability.
Wang revealed: “We’ll start building shuttle tankers next year. Equipped with dynamic positioning systems, these command at least 50% premiums over standard tankers, further enhancing margins.”
In 2024, DH Shipbuilding secured orders for three 154,000 DWT shuttle tankers from an Oceania-based owner, totaling ~USD 400 million. These 276.4m-long vessels feature DP2 systems and helipads, with per-ship costs of ~USD 130 million—far above standard tankers. Deliveries to Brazil’s Petrobras begin November 2026.
Wang concluded: “We’ll maintain profit-centric operations, optimizing fuel efficiency and owner conveniences in core segments to widen our technological edge, while selectively pursuing high-margin orders to solidify our market position.”
DH Shipbuilding’s IPO joint lead underwriters are KB Securities and NH Investment & Securities, with Shinyoung Securities as co-manager.
South Korean investment banking insiders noted that DH Shipbuilding’s successful IPO, as a representative mid-sized shipbuilder, holds symbolic significance. Amid industry consolidation, South Korea’s mid-sized shipbuilders underwent a brutal shakeout—from over 20 in 2008 to just four today: DH Shipbuilding, K Shipbuilding (ex-STX), Dae Sun Shipbuilding, and HJ Shipbuilding (ex-Hanjin Heavy Industries).
