Hyundai Marine Sets Ambitious Growth Goals After Successful IPO

KKR & Co.-backed ship repair company HD Hyundai Marine Solution Co. announced ambitious goals just a day after completing South Korea’s largest IPO in two years. The company aims for 25% growth in annual revenue over the next three years and plans to increase investments to combat marine emissions. Hyundai Marine saw its shares rise by 97% on their first day of trading, pushing its market value to over $5.3 billion. The company raised around $547 million in its IPO and intends to invest in shipyards in Southeast Asia, increase storage capacity, and develop technologies for greener ship renovations.

The CEO of Hyundai Marine, Lee Ki-dong, stated that the company has achieved significant growth in the after-market business in the past six years and expects to maintain this growth in the next three years. Hyundai Marine is in negotiations with shipping companies to potentially convert ships to methanol-powered dual-fuel vessels. The shipping industry is under pressure to decarbonize its fleets, with Hyundai Marine targeting a market for cutting-edge technologies that reduce CO2 emissions.

Hyundai Marine is focusing on advanced technologies to make ships emit less CO2, such as dual-fuel engines and converting old LNG vessels into Floating Storage Regasification Units. The company believes it has a 10-year lead over Chinese competitors in this area. While the replacement of exhaust gas cleaning systems typically costs $2-3 million per project, Hyundai Marine sees potential for higher revenue by replacing engines for dual-fuel vessels, potentially generating up to $50 million. KKR retains a 24% stake in Hyundai Marine after the IPO and plans for a “soft exit” in the future as the company seeks other investors.

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