Eugene Investment & Securities announced on July 30 that it has raised its target price for Samsung C&T from 380,000 won to 420,000 won, citing strong performance across its construction, trading, and fashion sectors that exceeded market expectations. The firm maintained its 'buy' rating.
Han Byeong-hwa, a researcher at Eugene Investment & Securities, stated in a report that while the stock price experienced a short-term drop due to concerns over semiconductor peaks, the expansion of the group's semiconductor factories is just beginning. He noted that if the potential AI bubble does not escalate too quickly, Samsung C&T's investment appeal remains high.
Han reported that Samsung C&T's second-quarter revenue and operating profit reached 12 trillion won and 1 trillion won, respectively, significantly surpassing consensus estimates. He attributed the strong performance to a 72% year-on-year increase in operating profit from the construction sector, driven by a higher proportion of high-tech sales, and a 178% year-on-year increase in trading profits due to increased volatility in raw material prices.
He also mentioned that the fashion sector's operating profit rose 64% year-on-year due to improvements in domestic market conditions. The key revenue drivers for the construction sector are the performance of related companies, with ongoing work on the P4 finishing project in Pyeongtaek and upcoming construction for P5 Fab 1, Fab 2, and the Giheung R&D center.
Han added that construction of the Taylor Fab 2 in the U.S. is expected to begin soon, and there is a high likelihood that the Yongin and Honam fabs will start construction within the next 2-3 years. He projected that Samsung C&T's guidance for high-tech orders this year was set at 6.8 trillion won, but it has already achieved 6.4 trillion won in the first half. If the current trend continues, it is likely to exceed the record high of 12 trillion won in high-tech orders set in 2023.
Additionally, he noted that the solar and battery energy storage system (BESS) projects currently underway in the U.S. and Australia are expected to expand into the southwestern region of South Korea. He also indicated a strong possibility of participation in the government's gas power plant project if it is confirmed.
* This article has been translated by AI.
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