[Click eStock] "Samsung C&T, Target Price 200,000 Won"

On the 3rd, KB Securities issued a buy rating and a target price of 200,000 KRW for Samsung C&T Corporation.

While the construction division supports operating profits at the level of 1 trillion KRW, the profit contribution from non-construction divisions is steadily increasing, demonstrating the strength of the business portfolio.

Investments in new growth engines such as hydrogen, solar power, and SMR are being actively developed, and the company is well-prepared to translate the improving fundamentals into shareholder returns, which is positive.

The profit-generating capability of the construction division supports the overall profit structure of the company. Operating profit in the construction division, which surpassed 1 trillion KRW in 2023, is expected to reach 1.1 trillion KRW in 2024 and 1.15 trillion KRW in 2025. Unlike many domestic construction companies struggling with cost ratio issues, Samsung C&T’s focus on housing projects centered in the Seoul area with strong pricing power and stable business operations in the high-tech sector are expected to enable maintaining annual operating profits exceeding 1 trillion KRW, which is a differentiating factor.

While the profit-generating capability of the construction division remains stable, the profit contribution from non-construction divisions is expected to continue increasing steadily. The operating profit contribution from non-construction divisions, which was only 30% in 2018, has stabilized across all sectors including bio, reaching the mid-60% range since 2022. It is projected to exceed 70% starting in 2027.

Most divisions, including construction, trading, and bio, are actively pursuing new businesses. In particular, in the renewable energy sector, unlike the traditional energy sector, business development and financial capabilities are crucial, and Samsung C&T’s possession of both construction and trading divisions is evaluated as a distinctive strength.

Samsung C&T plans to cancel all treasury shares held by 2026, starting from April this year. Researchers Moonjun Jang and Minchang Kang of KB Securities stated, "The dividend payout ratio was around 18% in 2022 and 2023, which is low, but considering the proactive shareholder return policy such as shortening the treasury share cancellation period, a reasonable increase in the dividend payout ratio can be expected in the future."

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