[Click eStock] "Samkang M&T, SK Acquisition Effects to Appear Quickly"

Offshore Wind Substructures Are Supplier-Dominant Market... Overseas Expansion Expected
Eugene Investment "Maintains Samkang M&T Target Price at 40,000 Won"

[Asia Economy Reporter Gong Byung-sun] There are expectations that Samkang M&T's order intake will accelerate beyond the original schedule due to the acquisition effect by SK Ecoplant. Although Samkang M&T's current stock price is declining, securities analysts say the actual corporate value has increased.

According to Eugene Investment & Securities on the 29th, SK Ecoplant announced on the 17th that it would acquire a 31.83% stake in Samkang M&T by investing 342.6 billion KRW. With the large-scale funds secured through SK Ecoplant's acquisition, Samkang M&T plans to build a dedicated production facility for offshore wind power substructures covering approximately 500,000 pyeong starting next year.

Although completion is scheduled for the end of the first half of 2024, related orders are already reported to be under discussion. Samkang M&T plans to hold meetings with major clients starting this week to explain the new expansion factory.

Researcher Han Byung-hwa of Eugene Investment & Securities explained, "Offshore wind power substructures are products positioned in a typical supplier-dominant market, with limited companies having supply experience and requiring large-scale capital for production facilities. Since offshore wind substructure installation begins at least two years before completion, related orders and contracts are confirmed 3 to 4 years in advance, so the acquisition effect will accelerate Samkang M&T's order expansion beyond the original schedule."

Overseas expansion, including Taiwan, is also anticipated. Offshore wind power substructures are ultra-heavy items weighing between 1,000 and 2,000 tons, so companies located in deliverable regions have an absolute advantage. This is also why Taiwan has become a major market for Samkang M&T. Recently, as several countries have expanded carbon reduction policies, offshore wind installation plans have been confirmed on the U.S. West Coast following Taiwan, Japan, Australia, and Vietnam. The market size for deliverable products is expected to continue expanding.

Although the stock price has weakened after the acquisition, Eugene Investment & Securities interprets that the actual corporate value has risen. Researcher Han said, "Because the domestic stock market has a strong short-term investment tendency, there was a strong desire for profit-taking considering the time required to complete the expansion. However, with the capital injection effect from a large corporation, Samkang M&T has gained an advantage in the global offshore wind power substructure market."

Accordingly, Eugene Investment & Securities maintained a 'Buy' investment opinion on Samkang M&T with a target price of 40,000 KRW. The closing price on the 26th was 19,500 KRW.

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