[Click eStock] "Samsung C&T, New Construction Orders Expected at 15 Trillion Won... Target Price Down"

[Asia Economy Reporter Hwang Yoon-joo] Yuanta Securities stated on the 29th that Samsung C&T is expected to see profit growth this year due to overseas project achievements. However, they maintained a 'Buy' investment rating while lowering the target price from 210,000 KRW to 190,000 KRW.

Choi Nam-gon, a researcher at Yuanta Securities, estimated, "Samsung C&T's consolidated operating profit for 2022 is expected to record a clear profit growth, reaching 2.0277 trillion KRW, a 69.5% increase compared to the previous year."

Researcher Choi explained, "This reflects factors such as the expansion of high-tech orders in the construction sector, profit growth in the fashion/leisure sector due to COVID-19 stabilization and cost reduction effects, and performance improvement of Samsung Biologics due to increased operation rates of Plant 3 and the inclusion of Samsung Bioepis."

He analyzed, "The new construction orders for 2022 are estimated to reach around 15 trillion KRW, exceeding the annual guidance by about 30%, driven by strong high-tech demand and overseas project achievements."

Regarding the lowering of the target price despite performance expectations, he diagnosed, "The profit of the trading division in the second half is expected to shrink compared to the first half due to the slowdown in raw material price increases," adding, "This reflects adjustments in earnings estimates and the value of major listed company equity holdings."

Meanwhile, the Samsung Group's governance structure is expected to likely remain unchanged. Researcher Choi stated, "Although there are expectations about Samsung C&T's potential transition to a holding company amid movements such as amendments to the Insurance Business Act and relaxation of the separation of financial and industrial capital, this is realistically an impossible scenario."

He explained, "If Samsung C&T acquires shares of Samsung Electronics, making Samsung Electronics a subsidiary of Samsung C&T, the holding company ratio would exceed 50%, making the transition to a holding company inevitable," adding, "This is not just about securing the 8.51% stake in Samsung Electronics held by Samsung Life Insurance, but it means facing a situation where an additional acquisition of up to 30% of Samsung Electronics shares is required due to the holding company transition."

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