[Click eStock] Samsung C&T, Earnings Fell Short of Expectations but...

The first Compliance Committee meeting after Lee Jae-yong, Vice Chairman of Samsung Electronics, was released took place privately on the 17th at the Samsung Life Insurance building in Seocho-gu, Seoul. The Samsung Life Insurance building on that day. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] Kyobo Securities maintained the target price of Samsung C&T at 200,000 KRW on the 28th.

Samsung C&T's Q3 performance this year fell short of market expectations due to one-time costs in the construction sector (approximately 200 billion KRW), but with Samsung Electronics' quarterly dividend and the profit from the sale of Hanwha Solutions, there is no impact on net income attributable to controlling interests and annual earnings estimates, so it was judged that changing the target price is unnecessary.

Samsung C&T recorded Q3 sales of 8.3 trillion KRW, up 5.8% year-on-year, and operating profit of 141 billion KRW, up 34.7% year-on-year. The construction sector turned to a loss due to the provision related to the last remaining Gangneung coal-fired power plant project (approximately 200 billion KRW) following the coal phase-out declaration.

The trading division saw profits increase by 78.3% year-on-year due to rising raw material prices and strong trading performance. The fashion division turned profitable thanks to strong online and imported product sales. The resort division recovered its performance despite the off-season, influenced by COVID-19.

Researcher Kwangje Baek of Kyobo Securities said, "Although Q3 results fell short of market expectations, record-high annual performance is expected this year, and the increase in dividends from affiliates is expected to strengthen net income stability." He added, "Considering the rapid profit growth of Samsung Biologics and the full-scale start of investments in new growth businesses such as solar power, hydrogen, electric vehicle charging, and modular construction, it is expected that Samsung C&T will transform from a value stock with high equity value into a growth stock in the future."