Samsung Electronics' "Special Dividend" Effect: Target Price for Samsung C&T Raised to 630,000 Won... Upward Revisions Continue [Weekend Money]

Expectations for Strengthened Shareholder Returns Driven by Samsung Electronics’ Expanded Dividends
Positive Order Momentum in Nuclear Power and High-Tech Construction Segments

Brokerages are steadily raising their target prices for Samsung C&T. This trend is driven by expectations of strengthened shareholder returns due to Samsung Electronics' increased dividends, as well as the growth potential of the nuclear power and SMR (Small Modular Reactor) businesses, and improved prospects for the high-tech construction division.

According to the brokerage industry on June 20, DS Investment & Securities sharply raised its target price for Samsung C&T the previous day from 3.8 million won to 6.2 million won. On the same day, LS Securities also increased its target price from 5.5 million won to 6.3 million won. Previously, IBK Investment & Securities had raised its target from 3.5 million won to 6.2 million won. On June 18, Samsung C&T closed at 485,500 won.

The key factor attracting the attention of the brokerage industry is the potential for enhanced shareholder returns at Samsung C&T due to the increased value of its stake in Samsung Electronics and higher dividends. Samsung C&T holds shares in core Samsung Group affiliates such as Samsung Electronics, Samsung Life Insurance, and Samsung Biologics. These holdings account for more than 90% of Samsung C&T's NAV (net asset value).

Jung Hyun Cho, a researcher at IBK Investment & Securities, noted, "The investment point for Samsung C&T stems from the revaluation of its equity holdings and the potential for increased shareholder returns. As the share prices of key affiliates have recently risen, the value of these holdings is expanding, increasing the likelihood of a NAV revaluation."

Soo Hyun Kim, a researcher at DS Investment & Securities, estimated that from 2026 to 2028, when large-scale dividends from Samsung Electronics are expected, Samsung C&T will redistribute 60-70% of the dividend income received annually from affiliates including Samsung Electronics and Samsung Life Insurance. Kim projected Samsung C&T's dividend per share for 2026 at 23,050 won (a dividend yield of 4.8%), which is a 720% increase from the previous year. The figure is expected to reach 41,030 won (a dividend yield of 8.6%) in 2027.

Kim especially compared Samsung C&T to SK Square, which has a market capitalization of 210 trillion won, and set Samsung C&T’s initial market cap target at 100 trillion won. He stated, "While the dividend scale of SK Square is uncertain, Samsung C&T's large-scale dividend is superior in terms of predictability. Considering the value of its own businesses, such as construction and SMR, the market cap gap between the two companies is excessive. As the market shifts towards seeking alpha in the second half of the year, Samsung C&T's clear dividend policy is expected to stand out as an attractive option."

Furthermore, the growth potential of Samsung C&T’s core construction business is viewed positively. From the second quarter, the completion of the Pyeongtaek P4 project and the main framework construction of P5 are proceeding in earnest, and this year's high-tech annual orders are expected to surpass the previous guidance of 6.8 trillion won. Saeryeon Kim, a researcher at LS Securities, commented, "Although the rise in the value of holdings in core affiliates is a driver for a share price re-rating, it is also the right time for the re-evaluation of business value in the construction division, especially with visible order achievements in nuclear power and SMR, to serve as a core momentum reflected in the share price."

Researcher Cho added, "A recovery in the core business could occur simultaneously with the high-tech investment cycle. The value of equity holdings is boosting NAV, dividend income is being transferred to shareholder return resources, and the core business is recovering through the high-tech investment cycle."

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