[Click eStock] "Samsung C&T: Shareholder Returns and SMR Prospects Lead to Target Price Upgrade"

On February 3, KB Securities raised its target price for Samsung C&T from 3.4 million won to 3.6 million won, an increase of 5.9%, while maintaining its "Buy" investment rating. This suggests a potential upside of 23.7% compared to the closing price of 2.91 million won on February 2.

KB Securities stated, "The strong upward momentum in the stock price since the second half of 2025 has been driven by the increased value of stakes in Samsung Electronics and bio affiliates," but cited the following three main reasons for the upward revision: ▲ expectations of profit recovery in the construction division in 2026, ▲ the potential announcement of a more shareholder-friendly return policy, and ▲ active engagement in nuclear power-related businesses, including SMR (Small Modular Reactor) projects.

For 2026, Samsung C&T's revenue is projected at 43.9 trillion won (up 7.6% year-on-year), with operating profit expected to reach 3.9488 trillion won (up 20.0%). The main growth drivers are the continued expansion of the bio division and the recovery of the construction division, which underperformed in 2025.

A new three-year shareholder return policy is scheduled to be announced in February, and it is anticipated to be more shareholder-friendly than previous policies. The existing policy centered on returning 60-70% of affiliate dividend income and canceling treasury shares.

Jang Moonjun, an analyst at KB Securities, commented, "Given the potential for a recovery in the construction division and the heightened demand for shareholder returns among investors in the Korean stock market, there is room to expect additional shareholder returns based on operating cash flow, beyond the redistribution of affiliate dividend income."

Samsung C&T is actively pursuing nuclear power projects as a new growth engine for its construction division. In particular, in the SMR sector, it is working on projects with both NuScale and GVH (GE Vernova-Hitachi), the leading third-and-a-half-generation developers, rather than relying on a single technology provider.

This strategy is interpreted as an intention to respond flexibly to the expansion of the SMR market in the future, regardless of reactor type. In the large-scale nuclear power sector, cooperation is expected in projects such as the Cernavoda Nuclear Power Plant in Romania (Fluor EPCM contract).

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