[Click eStock] Samsung C&T "It Has Risen but Is Still Undervalued"

[Asia Economy Reporter Junho Hwang] DG Financial Investment maintained its investment opinion on Samsung C&T as 'Buy' on the 28th and raised the target price to 180,000 KRW. The target price in April last year was 140,000 KRW.

DG Financial Investment reported that Samsung C&T's Q4 performance recorded sales of 8.1823 trillion KRW, up 6.3% year-on-year, operating profit of 25.6 billion KRW, down 21% year-on-year, and net profit of 240.2 billion KRW, down 51.9% year-on-year. They analyzed that although the B2C division (fashion, leisure, food and beverage) showed poor performance due to COVID-19, results improved in Q4. In particular, the operation rate of Biologics Plant 3 increased faster than expected, contributing to Samsung C&T's performance improvement.

DG Financial Investment set Samsung C&T's guidance for this year at 30.2 trillion KRW in sales, down 0.1% year-on-year, and new orders at 10.7 trillion KRW, up 12.7%. In the bio sector, with all three plants in operation, it is expected to lead to overall performance improvement, and if semiconductor equipment investment, which is currently shrinking, expands more than expected, an unexpected turnaround could be anticipated.

Yoonho Cho, analyst at DG Financial Investment, said, "What we want to say is that the stock price has risen less and the valuation burden is not large." He added, "At this point, Samsung C&T's market capitalization is actually below the value of its affiliate shareholdings." He continued, "Even if it is a base effect, the possibility of Samsung C&T's operating profit turnaround in 2021 is very high," and explained, "Samsung C&T's stock price is undervalued."