[THE INVESTOR] As Hanjin Shipping applied for court receivership, related shares experienced rises and falls, reflecting mixed views on the collapse of the largest maritime transport company in the country.
While Hanjin Group subsidiaries that emerged from further financial risks saw ups in their stock prices, companies held accountable for the shipper’s losses couldn’t avoid falls.
The largest stakeholder of the shipper, Korean Air’s shares traded at 31,850 won ($28.60) in the morning, 2.41 percent higher than the previous close. Hanjin KAL, the group’s holding company, also rose 2.63 percent to 19,500 won. Korean Air finished at 31,550 won. Hanjin KAL closed at 19,000 won.
“The possibility of Korean Air offering additional support for the shipper has been reduced, preventing its share prices from falling further,” said Ha Jun-young, an analyst at HI Investment & Securities.
“Risks regarding cash outflows of the airliner have been eased,” said Lee Ji-yoon, a researcher at Daishin Securities.
Hana Financial Investment raised its target price for Korean Air to 45,000 won.
“The airliner is expected to obtain a 33 percent increase in annual operating profit, reaching a record high of 1.2 trillion won, thanks to falls in oil prices and favorable growth in the number of travelers,” said Shin Min-seok, a researcher at Hana. “Meanwhile, the net profit is estimated to post a deficit on the impairment loss on the cost of the shipper’s receivership.”
Korean Air’s loss on the shipper is estimated to be around 376 billion won, according to the analyst.
Hyundai Merchant Marine, another ailing shipping company under a creditors-led restructuring scheme, enjoyed unsolicited gains on Wednesday as the financial authority decided to have HMM acquire competitive assets from Hanjin.
HMM shares soared more than 16 percent, trading at 8,640 won. The company was resuscitated from a near-court receivership as it reached an agreement with overseas shipowners to cut charter fees and successfully sold Hyundai Securities to KB Financial Group. It closed at 9,330 won, up 25.6 percent from Tuesday.
Some project a reshaping of the country’s shipping industry.
“Shippers that have been operating in the overlapping areas with Hanjin might see unsolicited gains,” said Eom Kyung-ah, a researcher at Shinyoung Securities. “HMM and Heung-A Shipping could secure additional shipowners in the routes that used to overlap with Hanjin’s.”
Heung-A Shipping’s shares rose nearly 11 percent to 1,415 won Wednesday.
On the other hand, Eusu Holdings, run by Choi Eun-young who formerly led Hanjin Shipping, is seeing its share value descend into a free fall. The company plummeted nearly 14 percent to 7,030 won on the same day.
Choi, who ran the shipper from 2008 through 2014, didn’t take responsibility for the losses accumulated during her leadership and ignored the company’s liquidity crunch before it went under the creditors’ oversight.
By Song Su-hyun/The Korea Herald ()
