"'Order-Rich' Samsung E&A: Will Shareholders Get Richer Too? [Click e-Stock]"

Revenue forecast to rise 24% next year, supported by work from affiliates
Focus on new energy orders and expanded shareholder returns

Winning construction contracts is the company's job. Whether those achievements translate into dividends is a concern for shareholders. That is why investors are turning their attention to early next year when looking at SAMSUNG E&A. With work from affiliates supporting its results, expectations are growing that new energy businesses and expanded shareholder returns could help boost the share price.

On November 11, Shinhan Securities maintained its target price of KRW 79,000 and its "Buy" rating for SAMSUNG E&A against this backdrop. The previous day's closing price was KRW 64,600.

For now, its order book is solid. SAMSUNG E&A reported an order backlog of KRW 27.2 trillion at the end of the third quarter of this year, equivalent to about three years of revenue based on last year's sales.

Revenue for next year is forecast at KRW 13.67 trillion on a consolidated basis, up 23.9% from Shinhan Securities' estimate for this year. Operating profit, however, is projected at KRW 1.4117 trillion, an increase of just 0.2%.

A key support for its results is work from affiliates with short construction periods. Such work is expected to exceed KRW 7 trillion over the next two to three years. The way projects are carried out has also changed. One prominent example is "modularization," in which major facilities are prefabricated and assembled on-site. This approach reduces on-site work, making it easier to manage construction schedules and quality. Shinhan Securities said these changes have strengthened the company's ability to manage costs and construction periods.

New energy will be a key area of focus next year. The company is expanding into areas such as hydrogen, ammonia and carbon capture. It is pursuing a "FEED-to-EPC" strategy, participating from the front-end engineering design stage and then moving on to full-scale projects that combine engineering, procurement and construction. In simple terms, the company aims to get involved from the initial design of a plant and secure the work to build it.

"The regions and types of projects being pursued are becoming more diverse, and some are awarded through negotiated contracts or under limited competition," said Kim Sun-mi, a research fellow at Shinhan Securities. "With the project pipeline at least as large as this year's, we expect new energy orders to increase next year."

Shinhan Securities emphasized that investors should pay particular attention to the shareholder return policy slated for announcement early next year. Since advance payments received when new orders are secured account for a large share of operating cash flow, the company's confidence in future orders could lead to expanded shareholder returns, the firm said. Net cash is also estimated to reach about KRW 3.3 trillion by the end of next year.

"At the current share price, next year's forecast price-to-earnings ratio (PER) is 10.2 times. Considering the strong earnings growth that could support a special dividend, including a 26% compound annual growth rate in operating margin from 2026 to 2028, a valuation premium is also possible," Kim said.

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