[Click eStock] "Samsung Engineering, Expect Orders in the Second Half"…Target Price ↓

[Asia Economy Reporter Lee Jung-yoon] Hyundai Motor Securities lowered the target price for Samsung Engineering from 35,000 KRW to 30,000 KRW on the 28th due to a lack of orders from the second half of last year to the first half of this year, resulting in a downward revision of earnings forecasts and valuation. However, the buy rating was maintained.

Samsung Engineering's provisional consolidated results for the second quarter of this year showed sales of 2.5 trillion KRW, up 47% year-on-year, and operating profit of 153.5 billion KRW, up 2.1%. Although the profit margin in the chemical sector fell short of estimates, sales in the non-chemical sector compensated for this.

In the chemical sector, losses due to rising raw material prices at the Saudi Arabia Jafurah site were reflected as a construction loss provision of 41.4 billion KRW. Other projects had less impact as the material order rate exceeded 80%, but in the case of Jafurah, the order rate was about 58%, which had an effect. Approximately 20 billion KRW was also reflected in other projects.

Samsung Engineering's new orders in the second quarter of this year amounted to 1.5 trillion KRW, mostly from non-chemical orders. Additionally, a special item in non-operating income was a gain of 31.3 billion KRW recognized from foreign exchange effects.

Samsung Engineering's order guidance is 8 trillion KRW, with 4.3 trillion KRW achieved in the first half, of which 3 trillion KRW came from the non-chemical sector. Researcher Kim Seung-jun of Hyundai Motor Securities explained, "Orders in the chemical sector have been low, and we are waiting for orders in the second half."

In the third quarter of this year, an 800 billion KRW order was secured for the Malaysia Shell OGP (Onshore Gas Plant for Rosmari Marjoram). Researcher Kim said, "We are also waiting for the results of the Vietnam PDHPP (1 billion USD)," adding, "In the fourth quarter, we are awaiting results from domestic S-Oil (2 billion USD), Qatar Ras Laffan (1.5 billion USD), and Algeria PHDPP (1 billion USD)." He further added, "If one or two sites are ordered in the second half, it is expected that the order guidance can be fully achieved."

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