HMM Co., Ltd. (KOSPI:011200) signed a ₩4.70 trillion freight contract with Vale International S.A. on September 7. The exchange form prints that as 43.13% of revenue. The percentage is not annual.
The contract runs from April 1, 2030 to October 31, 2056. That is 26.6 years. The 43.13% compares the whole of it against the single year of revenue HMM reported for FY2025.
Korea's single supply contract disclosure has a fixed shape. It asks for the contract amount, the most recent year's revenue, and the ratio between them. It does not ask for the term anywhere near that box. A one-year haulage deal and a 26-year one are therefore presented the same way, and the reader has to do the dividing.
So divide it. ₩4.70 trillion over 26.6 years is about ₩176.7 billion a year. Against FY2025 revenue of ₩10.89 trillion, that is 1.62%. The filing states its own conversion rate of 1,359.50 won to the dollar, which puts the contract at $3.46 billion in total and roughly $130 million a year.
| Line | Figure | |---|---| | Contract total | ₩4.70tn | | Term | Apr 2030 to Oct 2056 | | Revenue per year | about ₩176.7bn | | Share of FY2025 revenue, as filed | 43.13% | | Share of FY2025 revenue, per year | 1.62% |
This is not a criticism of HMM. The company filled the form in correctly. It is a warning about reading Korean contract disclosures at the headline, because the denominator is always one year and the numerator can be any length at all.
HMM earned ₩354.1 billion of operating income in the June quarter on ₩3.40 trillion of revenue. A full year of Vale revenue is about half that quarter's operating profit, and it is revenue rather than profit. The entire 26.6-year contract totals about 1.4 quarters of current revenue.
None of that says the deal is unimportant. It says the deal is slow. Nothing arrives before the first ship sails in 2030, and the filing says even that date moves with the delivery schedule.
On June 24 the board approved ₩1.66 trillion for eight bulk carriers and two gas carriers. The filing puts that at 6.26% of consolidated equity, with the last vessel due in the third quarter of 2031. Two lines in that document read differently after September 7. The bulk carrier order was resolved conditional on the cargo owner's board approving. The gas carrier order was conditional on the charterer's board.
September 7 is the day a cargo owner's board approval became a signed contract. HMM had already told the exchange twice that it could not confirm press reports about this deal, on July 9 and again on August 7. Korea's exchange can require a listed company to answer a press report on the record, and "we cannot confirm" is a permitted answer that itself gets filed.
The two filings do not use the same exchange rate. June's ship order was converted at 1,535.70 won to the dollar. September's contract used 1,359.50. Read side by side, HMM has committed about $1.08 billion of vessel orders and expects about $3.46 billion of revenue over 26 years. The order covers the gas carriers too, so not all of that capital serves this contract. Neither figure is net of fuel, crew, insurance or drydock.
HMM's revenue swings hard. FY2022 revenue was ₩18.58 trillion with ₩9.95 trillion of operating income. FY2025 revenue was ₩10.89 trillion with ₩1.46 trillion. Cost of revenue rose 14% between FY2024 and FY2025 while revenue fell 7%. Gross profit almost halved as a result. That is the container cycle working as it always does.
A 26-year cargo contract does not swing that way. The filing describes it as long-term freight for Brazil and China, and the ships being built for it are bulk carriers. It pays within ten business days of loading on each voyage, and there is no advance payment. What HMM buys is a thin strip of revenue that does not care where the freight indices go. Thin is the right word: ₩176.7 billion against ₩10.89 trillion is 1.6%. Eight ships is not a second business. It is a start on one.
The board's ₩29 trillion five-year investment plan is the frame this sits inside. Against that plan, ₩1.66 trillion of orders and one long contract is a first instalment, not the programme.
The filing lists the customer's options plainly, and they are not small. Vale may extend the term by up to five years. Vale may change the vessels' propulsion fuel. Either choice can move the contract amount. The amount also moves with the exchange rate, the oil price, the routes sailed and the number of days the ships operate.
The dates move too. The April 2030 start is the scheduled deployment of vessel number one, and it shifts with delivery. The October 2056 end depends on how many days the ships work.
So ₩4.70 trillion is a projection carrying a stated conversion rate and a published list of things that can change it. It is not a receivable, and the filing does not pretend otherwise.
Take the other side. A 26-year commitment from a single large cargo owner is a financing document as much as a revenue one. Ships get built against contracts like this, and HMM's June order was explicitly conditional on this one. Without the September signature, eight of those ten hulls arguably do not get ordered.
There is also a portfolio argument. HMM's equity is ₩28.73 trillion and its market capitalisation was ₩19.9 trillion at Tuesday's close. A business trading below its own book value does not need a large contract to change the story. It needs evidence that new capital is going somewhere with a contract attached rather than into more container capacity.
The number worth tracking is not the total. It is the delivery schedule, because the contract cannot earn anything until the ships exist. HMM says the last of the ten vessels is due in the third quarter of 2031, and the Vale service is meant to start in April 2030.
The second thing to watch is whether the remaining hulls get contracts of their own. Eight bulk carriers were ordered against one customer's approval. If the next few years produce more long-term freight disclosures on the same form, the strip stops being thin. If they do not, this stays a ₩177 billion-a-year line item that starts in 2030.
kstock reads DART every morning and writes up what moved — the contract, the buyback, the number that does not add up. The daily post and a Saturday roundup, by email.