Six ships worth 3.6 billion yuan! DH Shipbuilding secures its first order since going public

On September 22, South Korea's mid-sized shipbuilder DH Shipbuilding (formerly Daehan Shipbuilding) announced it has secured contracts to build six Suezmax crude oil tankers. This marks DH Shipbuilding's first new ship order since its listing on the Korea Exchange (KOSPI) on August 1 this year, highlighting the company's growing competitiveness in the global mid-sized tanker market.

These six new vessels come from two different customers. Among them, the "long-standing customer," who has maintained a longstanding partnership with DH Shipbuilding, placed an additional order for two Suezmax tankers this time, thanks to the exceptional quality of ships previously delivered by DH and the company's reliable delivery capabilities. Meanwhile, the "new customer" made a one-time bulk order of four Suezmax tankers during their very first collaboration with DH Shipbuilding, clearly demonstrating high confidence in DH's shipbuilding expertise and global reputation.

DH Shipbuilding stated that this major new ship order represents roughly seven months' worth of the company's workload and is classified as a high-quality contract. The total contract value reaches 710 billion Korean won (approximately $510 million or 3.628 billion RMB), equating to a per-ship cost of $85 million. For reference, according to Clarkson data, the current price for a newly built Suezmax tanker with a deadweight tonnage of 156,000 to 158,000 tons stands at around $86.5 million—representing a 4% decline compared to $90 million during the same period last year.

Although DH Shipbuilding did not disclose specific details about the shipowners, it is reported that four of the orders came from the Belgian shipowner EXMAR. The company announced on September 22 that it had placed an order with DH Shipbuilding for four additional Suezmax tankers, bringing the total to eight vessels with a combined deadweight of 157,200 tons. The first vessel in this batch is expected to be delivered in the third quarter of 2027.

According to data from the official website, EXMAR owns and operates 2 FSRUs, 44 LPG vessels, 1 LNG carrier, and 2 offshore support vessels. EXMAR CEO Carl-Antoine Saverys noted that EXMAR remains optimistic about the overall prospects of the Suezmax tanker segment, particularly given the aging condition of its fleet. He stated: "Currently, there are virtually no available shipyard slots for Suezmax tankers scheduled for delivery in 2027 or 2028. We’ve secured favorable pricing and are confident in this vessel type. Although the existing order book is substantial, we still view this as an exceptional opportunity."

According to reports, the six new vessels recently contracted by DH Shipbuilding meet the International Maritime Organization (IMO) Tier III emission standards and the Phase III requirements of the Ship Energy Efficiency Design Index (EEDI). Notably, two of these vessels will also be equipped with scrubbers, while another two have been pre-equipped with interfaces for LNG propulsion—allowing shipowners to retrofit them into LNG-fueled vessels in the future, as needed.

By securing orders for these six new vessels, DH Shipbuilding has now locked in a stable order backlog covering nearly three years, with current orders totaling approximately $2.6 billion and RMB 18.5 billion. In the first half of this year, DH Shipbuilding maintained a cautious approach to strategic order acquisition; however, starting in the second half, the company began adapting to market changes by ramping up its more proactive order-placing activities.

A relevant official from DH Shipbuilding stated: "It is highly significant that our long-standing customer placed another order following this year's new ship deliveries, while a new customer signed a large-scale contract on their very first order. Building on our proven technological expertise and reliable delivery capabilities, we will continue to strengthen the trust of shipowners worldwide."

Since being acquired by the Korean private equity firm KH Investment Group (KHI) in September 2022 and adopting a "new management model," the company has implemented a series of strategic initiatives aimed at enhancing cost competitiveness, which have played a pivotal role in its success. Following the acquisition, DH Shipbuilding, guided by KHI's business philosophy that emphasizes intrinsic growth, has focused its marketing efforts on its core ship types while pursuing a selective order-placing strategy centered on securing high-margin contracts. As a result, in 2024, DH Shipbuilding achieved approximately a 14% global market share in the medium-sized tanker segment, ranking first worldwide.

In 2024, DH Shipbuilding achieved operating revenue of 107.46 billion Korean won (approximately RMB 5.656 billion), representing a 32% year-on-year increase. The company also posted an operating profit of 158.2 billion Korean won (about RMB 830 million), a remarkable 340% rise compared to the previous year—second only to HD Korea Shipbuilding & Offshore Engineering among South Korea's mid-to-large-sized shipbuilding firms. Meanwhile, DH Shipbuilding saw a significant improvement in its debt-to-equity ratio, dropping sharply from 374% in 2023 to 198% in 2024.

In the first half of this year, DH Shipbuilding achieved cumulative operating revenue of 603.7 billion Korean won (approximately $440 million or 3.07 billion RMB), with cumulative operating profit reaching 132.2 billion Korean won (about $97.16 million or 670 million RMB). The company's operating profit margin stood at 21.9%, exceeding last year's full-year figure by more than 7 percentage points, placing it firmly at the top among South Korean shipbuilders.

On August 1 this year, DH Shipbuilding was listed on the Korea Exchange, raising approximately KRW 500 billion (about RMB 2.6 billion). DH Shipbuilding plans to leverage the funds raised from the IPO to strengthen its shipbuilding competitiveness and establish a solid foundation for sustainable growth. The company will first allocate the capital toward building its R&D center, advancing green and eco-friendly initiatives, upgrading technologies for innovative ship designs, and boosting marketing efforts aimed at expanding global orders. Additionally, DH Shipbuilding will strategically invest in areas such as production automation, further enhancing the company’s profitability.

According to Clarkson's data, excluding the latest orders, DH Shipbuilding currently holds a total of 17 vessels with a combined deadweight tonnage of 2.621 million tons. These include 16 Suezmax tankers and 1 LR2 tanker, with delivery schedules extending as far as 2027.