[Click eStock] "Samsung C&T Enters Phase of Valuation Relief... Target Price Up"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment has raised the target price for Samsung C&T to 160,000 KRW, stating that the company has entered a phase of easing undervaluation.

On the 23rd, DB Financial Investment analyst Yoonho Cho reported that Samsung C&T's sales in the fourth quarter of last year decreased by 3.4% year-on-year to 7.6979 trillion KRW, while operating profit increased by 33.7% to 324.7 billion KRW. Cho explained, "Considering that the market expectation for operating profit was around 250 billion KRW, this was a surprising result," adding, "The reason was the sharp increase in Biologics' fourth-quarter operating profit to 107 billion KRW (96 billion KRW on a consolidated Samsung C&T basis) due to higher utilization rates and an increased sales proportion of higher-priced products." The performance of other business divisions was in line with expectations.

This year is also expected to achieve results similar to last year. Cho forecasted, "Samsung C&T's management plan for this year targets sales of 30.3 trillion KRW and new orders of 11.1 trillion KRW," adding, "Sales and new orders are expected to be similar to last year, and the change in operating profit is not expected to be significant."

The investment opinion remains 'Buy,' and the target price has been raised to 160,000 KRW. Cho stated, "The rise in Samsung C&T's stock price since the fourth quarter of last year is more due to the increase in Samsung Electronics and Biologics stock prices highlighting undervaluation appeal rather than fundamental improvements," and explained, "Although there will be no major changes within the company this year, the undervaluation appeal remains valid."