What Happened? Analyzing the After-Hours Block Trade

On September 22, 2025, a large block of 3,000,000 HJ Heavy Industries shares was traded after-hours for 87.4 billion KRW. Notably, foreign investors were net buyers of 89.8 billion KRW, while other institutional investors sold 79.1 billion KRW.

Declining Sales, Rising Debt: Is HJ Heavy Industries’ Fundamentals Sound?

  • Sharp decline in sales and profitability: Q1 2025 revenue dropped by 51.3% year-over-year to 917.8 billion KRW, primarily due to weaknesses in the shipbuilding and construction sectors.
  • High debt-to-equity ratio: The high debt-to-equity ratio of 564.98% raises concerns about the company’s financial health.
  • Decreasing cash flow: While operating cash flow remains positive, cash outflow from investing and financing activities is increasing.
  • Sector-specific uncertainties: The shipbuilding division faces a global economic slowdown and increased competition, while the construction division grapples with rising raw material prices and a slump in the real estate market.

Impact of the Block Trade on Stock Price

The after-hours block trade and foreign investor buying could provide a short-term upward momentum for the stock price. However, it’s crucial to consider negative factors like weak fundamentals and macroeconomic uncertainties.

Action Plan for Investors: Cautious Observation and Prudent Investment

  • Short-term investment: Investors should be mindful of potential volatility and consider the possibility of short-term gains.
  • Long-term investment: Continuous monitoring of earnings improvement and financial stabilization is essential. Pay close attention to order trends, changes in macroeconomic indicators, and the company’s efforts and achievements in improving its financials.