[Click eStock] "Samsung E&A: Orders Regardless of Region... Target Price Raised"

Raised from 60,000 won to 66,000 won

Shin Young Securities raised its target price for Samsung E&A to 66,000 won from 60,000 won on Oct. 7, citing the company’s reliable earnings and order performance, and maintained its “Buy” rating.

“Samsung E&A has secured a growth path that sets it apart from other construction companies through investment in advanced industries by its affiliates. At the same time, it is expanding its base of repeat orders in non-affiliate businesses through traditional petrochemicals and its ‘FEED (front-end engineering and design) to EPC (engineering, procurement and construction)’ strategy,” said Park Sera, an analyst at Shin Young Securities. “Given its structure, which combines strong growth with sustainable earnings, and the fact that this is not simply a temporary surge in orders but a change in earnings quality, we believe it is justified to apply a higher multiple than those of global peers.”

She forecast third-quarter revenue of 2.429 trillion won, up 21.7% from a year earlier, and operating profit of 255.1 billion won, up 44.5%. She said no issues requiring additional cost recognition have been identified at major project sites despite geopolitical uncertainty in the Middle East, and that the new order guidance the company can announce warrants attention.

She particularly emphasized that order activity for Samsung E&A is evident across multiple fronts. “Improving conditions for project awards are not limited to a particular region or a single project,” Park said. “In the Middle East, awards for follow-up petrochemical projects have continued after SAN-7, while affiliate investments are also expected to contribute more to orders in the second half of the year, centered on Pyeongtaek P5.”

“It is also positive that, in addition to competitive bidding, the use of negotiated contracts and Early Engagement—in which EPC contractors collaborate from the initial stages of a project—is expanding,” she said, noting that “project pipelines are improving simultaneously across regions, products and procurement methods.”

LNG is expected to emerge as a new pillar of orders next year. Samsung E&A is currently working on one FEED project and one Pre-FEED project in the LNG sector, and plans to bid on three additional FEED projects in the second half of the year. “Among the projects currently underway, Indonesia’s Abadi LNG is expected to be the first to transition to EPC, and the results of the FEED-to-EPC strategy are expected to become increasingly evident from 2027,” Park said.

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