[Click e-Stock] "SAMSUNG E&A Expected to Achieve Record New Orders This Year... Target Price Raised"

BNK Securities Sets Target Price for SAMSUNG E&A at 60,000 Won
"Opportunities Abound Amid Rising Energy Security Concerns and Middle East Reconstruction"

On May 20, BNK Securities raised its target price for SAMSUNG E&A from 36,000 won to 60,000 won (+66.67%), while maintaining a 'Buy' investment rating. The firm cited the restructuring of the energy supply chain and reconstruction projects in the Middle East as reasons for expecting SAMSUNG E&A’s order intake this year to reach an all-time high.

In the first quarter, SAMSUNG E&A recorded sales of 2.2674 trillion won, up 8.1% year-on-year. By segment, petrochemicals accounted for 1.1299 trillion won (+3.5%), advanced industries for 574.2 billion won (-25.3%), and new energy for 563.3 billion won (+136.9%). Despite a sharp decline in advanced industries sales due to the depletion of group construction backlogs, the full-scale launch of overseas clean energy projects offset this decline with strong growth in the new energy segment.

Operating profit reached 188.2 billion won (+19.6%). Although SG&A expenses increased due to retirement allowances (SG&A ratio +0.4 percentage points), improvements in the cost ratio (-1.2 percentage points) led to a significant rise in operating profit growth.

As the Middle East war has made energy security a top priority, the order environment for this year is expected to improve. Whereas in the past gradual energy transition was pursued, now major countries are focused on securing all available energy sources as quickly as possible.

Lee Sunil, a researcher at BNK Securities, stated, “This global restructuring of the energy supply chain could present a major opportunity for SAMSUNG E&A. This is because SAMSUNG E&A is an all-weather EPC (engineering, procurement, and construction) player capable of handling not only traditional petrochemicals but also new energy businesses such as clean energy, LNG, and water treatment, across various project types and regions.”

He added, “Taking into account the Middle East reconstruction projects and orders from affiliates, this year’s new orders are expected to reach an all-time high of 15.5 trillion won.” New order volumes in the previous year and in 2024 came to 14.415 trillion won and 6.357 trillion won, respectively.

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