Korean shipbuilders' earnings are forecast to improve through 2008 and beyond as the tight supply and demand balance allows them to pass on rising costs, said investment bank Lehman Brothers
in a report.
Lehman's expects earnings at the shipyards to report a 64 percent growth over the 2006-2008 period as revived interest in container ship investment amid continued demand for tankers and gas carriers
is increasingly making global shipbuilding a seller's market.
"At the same time, Korean shipyards
are more keen on managing risk and costs by hedging their foreign exchange exposure and procuring lower-cost steel plates from
China," the report said.
It also noted that Korean shipyards' flexible vessel design capabilities are the key differentiating factor that positions them ahead of their Japanese and Chinese counterparts.
Lehman's top picks were Hyundai Heavy Industries Co.
among shipbuilders, and Samyoung M-Tek among vessel parts suppliers.
Yet, it might not be all smooth sailing for Korea's shipyards after 2008 with Brazil
, Russia, India
and China rushing
to build large shipyards to meet the growing demand for vessels to transport oil
and raw materials, according to maritime information portal site Marine-net.