"SAMSUNG E&A Shows Strong Order Momentum... Target Price Set at 73,000 Won" [Click eStock]

Daishin Securities Selects Samsung E&A as Top Construction Sector Pick

On June 17, Daishin Securities initiated coverage on SAMSUNG E&A, highlighting its strong order momentum driven by opportunities in the Middle East and reconstruction, new energy, and captive (affiliate) demand. The brokerage assigned a "Buy" recommendation and set a target price of 73,000 won. SAMSUNG E&A was also selected as Daishin Securities' top pick within the construction sector.

Regarding orders for projects in the Middle East and reconstruction, Daishin Securities identified two key drivers: post-war reconstruction demand and expanding investment in energy infrastructure. Hyejin Lee, a research analyst at Daishin Securities, noted, "Thanks to its experience in engineering, procurement, and construction (EPC) projects in the Middle East, SAMSUNG E&A is well positioned to participate in reconstruction initiatives. Furthermore, higher oil prices are enhancing the fiscal capacity of Gulf Cooperation Council (GCC) countries, accelerating plant and infrastructure investments and benefiting the company."

On the topic of new energy, the analyst expected SAMSUNG E&A's core energy order portfolio to strengthen further as the global energy transition and focus on energy security continue. SAMSUNG E&A is actively pursuing projects in LNG, green hydrogen, ammonia, sustainable aviation fuel (SAF), carbon capture, utilization and storage (CCUS), and clean methanol.

The analyst also anticipated an increase in capital expenditure (CAPEX) from affiliates, supported by the semiconductor cycle. Lee explained, "Orders from affiliates are expected to contribute to stable sales growth, given their high order visibility and rapid revenue recognition."

Based on these forecasts, Lee commented, "Although the company previously set its annual order guidance at 12 trillion won for this year, there is a possibility that it could be revised upward." According to Daishin Securities' estimates, SAMSUNG E&A's consolidated results are projected to reach sales of 10.2689 trillion won (up 13.7% year-on-year) and operating profit of 910 billion won (up 14.9%).

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