New Orders and Raw Material Recovery... Samsung C&T's Outlook Bright for This Year

Increase in Orders for Bangladesh Airports and Group Companies

[Asia Economy Reporter Minwoo Lee] It is forecasted that Samsung C&T's performance this year will be bright due to the recovery of raw material prices, new orders, and the recovery of affiliate stock prices.

According to Kyobo Securities on the 12th, Samsung C&T is estimated to have recorded sales of 7.6 trillion KRW and an operating profit of 273 billion KRW in the fourth quarter of last year. Although construction performance slightly slowed down, causing sales to decrease by 4.8% compared to the same period last year, operating profit increased by 12.4% due to overall profit improvement.

This year, performance is expected to improve more substantially. Kyobo Securities projected Samsung C&T's sales to reach 31.546 trillion KRW and operating profit to be 933 billion KRW this year, representing increases of 2.9% and 14.4%, respectively, compared to last year.

Key positive factors include ▲an increase in order volume such as the resumption of group company investments ▲an increase in the value of listed equity holdings due to the recovery of affiliate stock prices including Samsung Electronics ▲expectations for a new shareholder return policy announcement in 2020. Researcher Kwangje Baek of Kyobo Securities explained, "In the fourth quarter of last year, construction sales decreased due to a temporary gap in orders compared to the previous year, but overall profit improvement maintained a stable level. Annual orders were somewhat sluggish until the third quarter of last year, but thanks to the Bangladesh international airport project and increased group company order volumes, the annual target of 11 trillion KRW is expected to be nearly reached."

Kyobo Securities selected Samsung C&T as the top pick within the industry. The investment opinion is 'Buy', with a target stock price of 150,000 KRW. The closing price on the 10th was 107,000 KRW.

This content was produced with the assistance of AI translation services.