[Click eStock] Samsung Heavy Industries Expected to Benefit from China's Restraint... Target Price Raised

On the 17th, Kiwoom Securities raised the target price of Samsung Heavy Industries from 15,000 KRW to 17,000 KRW, expecting it to benefit indirectly due to the U.S. Department of Defense's strengthened restrictions on China's shipbuilding and shipping industries. The investment opinion was maintained as 'Buy.' Samsung Heavy Industries' closing price was 13,350 KRW.

원본보기 아이콘

In a report released on the same day, analyst Han-gyeol Lee of Kiwoom Securities stated, "We expect the fourth-quarter operating profit to be 150.5 billion KRW, in line with consensus," and analyzed, "The improvement trend in performance continues due to an increase in operating days compared to the previous quarter and a rise in the sales proportion of high-priced vessels."

He added, "We believe the performance improvement trend will continue as the sales proportion of high-priced vessels in the order backlog remains on the rise and operating days increase compared to the previous quarter."

Benefits from the resumption of U.S. LNG export approvals are also anticipated. Analyst Lee said, "We expect that after President Trump's inauguration on January 20, approval for U.S. LNG exports will resume," and noted, "This is expected to lead to an increase in orders for LNG carriers and the activation of offshore projects, benefiting the company. The company is expected to achieve new orders exceeding approximately 10 billion USD this year."

Accordingly, reflecting this year's order outlook, the company's year-end order backlog is expected to maintain 3 to 3.5 years of workload, and the performance improvement trend is anticipated to continue long-term.

Sales for this year are projected to increase by 10.7823 trillion KRW compared to the same period last year, and operating profit is expected to rise by 54.7% to 740.8 billion KRW. He stated, "This year, the sales proportion of Qatar LNG carriers scheduled for delivery in 2026 will increase, which is expected to moderate the pace of profitability improvement in the merchant ship sector. However, from 2026, the recognition of sales from orders placed in 2023, when ship prices rose sharply, will increase, and the performance improvement trend is expected to accelerate again."

He also viewed the expansion of offshore sector sales from the second half of the year positively. Analyst Lee forecasted, "As Chinese shipbuilding and shipping companies have recently been listed on the U.S. Department of Defense's blacklist, strengthening restrictions on China's shipbuilding and shipping industries, a reflective benefit is expected."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.