[Click eStock] Samsung C&T, Reviewing Business Direction and Investment After Earnings

[Asia Economy Reporter Lee Seon-ae] On the 18th, KTB Investment & Securities maintained a buy rating and a target price of 160,000 KRW for Samsung C&T Corporation.

The target discount rate, a price indicator applied to the net asset value (NAV) per share, was raised by 3 percentage points to 53%. The 53% discount rate represents the upper bound during the first half of 2018 when M&A expectations were heightened. Although the current discount rate is 67.3%, slightly reduced from its peak, the upward trend continues.

KTB Investment & Securities Research Center stated, "Since the management vacuum ended in August last year, the waiting period for investment announcements has lengthened, making the trend of discount expansion inevitable. Additionally, with the upcoming listing of stocks with massive expected market capitalization, there is a persistent supply-demand burden due to declining market share, so unless strong investment incentives arise in the short term, January is expected to be a period of consolidation."

However, investment points include expectations for investment promotion based on increased cash, recovery of performance from the previous quarter's shock, and stable annual dividend increases. After earnings, the business direction and investment plans are judged to be short-term stock price drivers.

Meanwhile, attention should be paid to the policy of redistributing 60-70% of dividends received from affiliates over the past three years. The 2021 dividend includes the first year of special dividends from Samsung Electronics in 2020 as income, with an expected DPS of 4,000 KRW. Even if dividend income is maintained, a stable increase in DPS is possible due to the payout ratio rising within the 60-70% range.