[Market Focus] Samsung C&T Surges on Expectations of Increased Value in Samsung Electronics and Biologics Holdings, Hits Record High

Samsung C&T saw its share price surge by over 7%, reaching a new 52-week high during trading hours.

As of 9:19 a.m. on October 29, Samsung C&T was trading at 221,500 won, up 14,500 won (7.00%) from the previous day. During the session, the price climbed as high as 224,500 won, setting a new 52-week high.

The rise in share price is believed to have been driven by solid earnings and expectations for an increase in the value of its holdings in Samsung Electronics and Samsung Biologics.

The previous day, Samsung C&T announced consolidated third-quarter sales of 10.1509 trillion won and an operating profit of 993.4 billion won. Compared to the same period last year, sales decreased by 1.5%, while operating profit increased by 34.9%. Song Yurim, a researcher at Hanwha Investment & Securities, stated, "The operating profit figure is 25.4% higher than the consensus estimate (the average forecast by securities firms) of 791.9 billion won," adding, "Despite continued sluggish performance in the construction division, the bio division delivered strong results that more than offset the weakness." She continued, "Starting in the fourth quarter, as high-tech sales recover with the completion of the Pyeongtaek P4 project and the U.S. Taylor facility project, and as revenue from previously secured large-scale plant sites ramps up, the construction division is expected to rebound. Accordingly, both sales and operating margin for the construction division are expected to improve next year." Hanwha Investment & Securities raised its target price for Samsung C&T from 225,000 won to 270,000 won. Song explained, "We raised the target price to reflect the increased value of holdings in Samsung Electronics and Samsung Biologics," and added, "The resumption of high-tech investments and the announcement of shareholder return policies are supporting the share price floor, while the materialization of the nuclear power business will serve as a momentum driver for the stock."

Shinhan Investment also raised its target price for Samsung C&T to 270,000 won. Eun Kyungwan, a researcher at Shinhan Investment, explained, "Recently, the sharp rises in Samsung Electronics and Samsung Biologics have led to a successful revaluation of the stock," adding, "The target price was raised to reflect the increased value of its holdings."

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