[Click eStock] "Samsung C&T, Operating Profit Improvement Expected... Promising for Long-term Investment"

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 10th presented a buy rating and a target price of 137,000 KRW for Samsung C&T, stating that investment is promising from a long-term perspective.

Samsung C&T is a company with a de facto holding company status within the Samsung Group and is a microcosm of the Korean economy. It directly or indirectly covers almost all industries except banking and automobiles, including construction, trading, food and beverage, fashion, resorts, semiconductors, mobile, displays, software, bio, and finance.

Researcher Chaesangwook from Hana Financial Investment said, “The smooth transition to a holding company after the merger has been in a lull due to successive issues such as merger opposition lawsuits, Samsung Biologics accounting fraud, and involvement in the political scandal,” adding, “Samsung C&T is supplementing this by partially resolving the circular shareholding structure and establishing a compliance body for dividend policy.”

This year, the company is in a phase where the value of equity stakes in affiliates is rising from an operational perspective. Sales this year are expected to decrease by 1.2% year-on-year to 30.4 trillion KRW. Operating profit is expected to increase by 8.6% to 941.7 billion KRW.

The construction sector is expected to enter the housing market newly amid stable volume. Food and beverage, fashion, and resorts are expected to be exposed to the impact of COVID-19, but since their profit contribution is low, qualitative volatility is not expected to be significant.

The company’s operating value totals 7.4 trillion KRW, divided into construction (1.9 trillion KRW), trading (600 billion KRW), fashion (800 billion KRW), and bio (4.1 trillion KRW). Non-operating value amounts to 25.5 trillion KRW, including electronics, life insurance, SDS, and engineering.

Researcher Chaesangwook explained, “The company’s profits are expected to be solid, centered on construction and bio, but since the non-operating part is more than four times larger, the stock price will be greatly influenced by the non-operating sector,” adding, “As market expectations have risen, developments ensuring shareholder returns, market friendliness, and fairness will be necessary.”

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