[Click eStock] "Samsung Heavy Industries to Take a Leap Forward with 'MASGA'... Target Price Up"

Korea Investment & Securities has projected that Samsung Heavy Industries will be able to narrow the gap with its competitors and take a leap forward as a beneficiary of MASGA (Make American Shipbuilding Great Again). The firm maintained its "Buy" investment rating and raised its target price to 32,000 won.

Kang Kyungtae, a researcher at Korea Investment & Securities, stated, "Unlike its competitors, which have opportunities for new naval shipbuilding, Samsung Heavy Industries previously had no connection to the U.S. market. MASGA serves as a key factor that can help close the valuation gap with competitors," adding, "This is an opportunity to buy the only shipbuilder whose current valuation can be fully explained by its core business value, before a full-fledged re-rating takes place."

Kang believes that the value of MASGA will quickly materialize if funding and investment plans are presented. He said, "For the MASGA value, estimated at 15.1 trillion won, to be fully realized, a significant event is necessary-specifically, the announcement of a direct investment plan, rather than just an MOU."

He continued, "Securing funding is essential to execute the investment plan. To achieve results quickly through rapid investment, it is necessary to actively raise funds. This could be done by borrowing at low interest rates through public and private financial institutions participating in MASGA, or by attracting government participation. However, the possibility of a capital increase cannot be ruled out."

Kang explained, "We are raising the target price by 33.3% to 32,000 won. Based on upside potential, this is our top pick in the shipbuilding sector." He added, "The target price was calculated by dividing the appropriate corporate value of 27.9 trillion won by the number of shares outstanding (854 million shares). The appropriate corporate value was derived by adding the core business value of 19 trillion won and the MASGA value of 8.9 trillion won, then subtracting net debt."

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