[Click eStock] "Samsung C&T's Eco-Friendly Business Will Translate into Earnings"

Continued Performance Improvement in Corporate, Fashion, and Bio Sectors
Hi Investment & Securities "Maintains Samsung C&T Target Price at 160,000 KRW"

[Asia Economy Reporter Gong Byung-sun] Samsung C&T's eco-friendly business, which has been expanding for some time, is expected to show growth potential. The trading, fashion, and bio sectors are also projected by the securities industry to contribute to this year's performance.

On the 30th, Hi Investment & Securities maintained a 'Buy' rating and a target price of 160,000 KRW for Samsung C&T. The previous day's closing price was 122,500 KRW.

The growth potential of the eco-friendly business is expected to become visible soon. In the construction sector, expansion is underway in liquefied natural gas (LNG) combined power plants and storage facilities. The construction division aimed for new orders worth 10.7 trillion KRW this year but has already secured 7.5 trillion KRW in orders in the first half alone. Successfully winning various domestic and international orders such as Qatar LNG, Taiwan Airport, and Singapore subway projects was instrumental.

Lee Sang-heon, a researcher at Hi Investment & Securities, explained, “Regarding LNG in the construction sector, we have successfully completed LNG terminal construction projects in Singapore and Malaysia and are currently working on Vietnam's first LNG terminal project. Domestically, we have experience constructing 18 out of 75 LNG tanks.”

The trading division is entering the hydrogen business. In August, Samsung C&T signed a business agreement with Namhae Chemical and Korea Southern Power to introduce and utilize clean hydrogen. Samsung C&T is expected to be responsible for developing the overall business model from overseas clean hydrogen production projects to domestic introduction and utilization. The researcher said, “If the eco-friendly fuel supply chain such as hydrogen is established domestically and the eco-friendly business portfolio is expanded, growth potential can become visible.”

(Provided by Hi Investment & Securities)

Meanwhile, Samsung C&T's performance is expected to improve significantly this year. Hi Investment & Securities estimated Samsung C&T's sales for this year to increase by 7.5% year-on-year to 32.4937 trillion KRW, and operating profit to rise by 60.7% to 1.3772 trillion KRW. This is because the trading, fashion, and bio sectors are expected to show balanced growth.

The trading division is benefiting from global economic stimulus policies and the effect of rising raw material prices. As a result, the trading division's operating profit in the first half reached 174 billion KRW, surpassing last year's full-year operating profit of 93.5 billion KRW. With raw material prices continuing to rise in the second half, the performance improvement trend is also expected to continue.

The fashion division is awaiting the peak season in the fourth quarter. Additionally, by withdrawing inefficient brands and reorganizing distribution channels, the first half operating profit recorded 64.3 billion KRW. The bio division also saw an increase in the operating rate of its third plant after successfully securing new product orders.

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