According to Eon Hwang of Nomura, the high valuations of South Korean shipbuilding stocks may face a correction in the second half of the year. The analyst noted in a report that expectations of winning more defense contracts and rising freight rates, amid shipping disruptions in the Suez Canal and the Strait of Hormuz, are likely to support valuations in the first half of the year. However, Nomura has turned cautious about the second half due to falling new vessel prices and an easing of tensions in the Middle East. Nomura downgraded HD Hyundai Heavy Industries from "neutral" to "reduce" and slashed its target price by 33% to 350,000 won. The rating for its indirectly controlled affiliate, HD Korea Shipbuilding & Offshore Engineering, was also cut from "buy" to "neutral," with its target price reduced by 33% to 410,000 won. Shares of HD Hyundai Heavy Industries fell 0.7% to 563,000 won, while HD Korea Shipbuilding & Offshore Engineering dropped 1.6% to 407,000 won.