The first few months of 2010 were filled with grim news about shipbuilders, as orders dried up and liquidity crunches forced small companies out of business. Amid an industry-wide restructuring, many questioned whether even the top tier could survive.

But Sokje Lee, a Seoul-based senior analyst with Mirae Asset Securities, told investors that top-tier shipbuilders would emerge from restructuring not just as survivors, but as big winners. He kept buy ratings on the industry's top makers all year, a decision that helped win him Asia's Best Analysts' top ranking in 2010 for the heavy machinery and materials sector.

"There were worries over the declining number of new orders or production capacities," Mr. Lee said, "but those are not leading indicators to forecast the shipbuilding sector—rather, lagging factors."

So the 40-year-old analyst with 12 years of experience studying heavy machinery and materials turned his eye in 2010 to a more forward-looking theme: fuel efficiency. New carbon-emission regulations were about to trigger competition among owners to put more emphasis on fuel use than price, he said.

When a maritime-industry publication reported in August that Maersk, the world's largest container-shipping line, was preparing to order megasize vessels expected to have a lower top speed than smaller ones—thus consuming much less fuel per unit—Mr. Lee inferred that shippers were in earnest about improving efficiency.

"From that point, I thought container-ship orders would recover faster than expected," Mr. Lee said.

Among his top picks for 2010, Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering returned 160% and 111%, respectively, for the full year.

Mr. Lee said he remains optimistic for South Korean shipbuilders into 2011. As restructuring comes to an end and demand grows for ships with lower carbon emissions, "shipyards with technological edge will strengthen ever more," he said.

His pick for 2011 is STX Offshore & Shipbuilding, the world's fourth-largest shipbuilder by order. The company posts around $10 billion in yearly revenue, but its market capitalization is only about $2 billion.

"It's the most undervalued stock in the sector," he said.

His first report on STX O&S, pointing out its product diversity and strong growth potential, won much market attention in the South Korean bourse; shortly after he initiated coverage of STX O&S by declaring it had upside potential of 151%, the stock went up limit-up 15%.