[Click eStock] "Samkang M&T, Unmatched Competitive Advantage Confirmed by Orders"

[Asia Economy Reporter Kwon Jaehee] Eugene Investment & Securities maintained a 'Buy' rating and a target price of 40,000 KRW for Samkang M&T on the 22nd.

Samkang M&T, which recently announced through a public disclosure that it secured an offshore wind foundation structure order worth 600.7 billion KRW for the Taiwan Hailong Project, is now in a situation with heightened expectations for additional orders. The recently secured order is for jacket-type structures supporting 14MW turbines, marking the first global production of this kind. Previously, the jackets ordered by Samkang M&T were for 8-9MW turbines, with heights of 75-85m and a maximum weight of 1,200 tons, whereas the 14MW class jackets measure 83-94m in height and weigh up to 2,080 tons. For manufacturing and transportation, not only technological advancements but also the enlargement of Goliath cranes and offshore cranes are necessary. Most offshore wind projects to be installed in the future, not only in Taiwan, will use turbines of 14MW or larger. Therefore, calls for Samkang M&T are bound to increase. This has become an opportunity to widen the gap with potential competitors. Additional orders for the Taiwan Hailong Project and Orsted's Changhua 2b&4 (920MW) and 3rd round additional projects (500MW) are expected in the first half of next year.

Moreover, Samkang M&T has been selected as the engineering company for the fastest floating offshore wind project in Ulsan, Gwisin-Gorae 2, together with France's Technip. Floating offshore wind requires the presence of a manufacturing base behind the scenes far more than fixed offshore wind, as the assembly of the floating body and turbine must be completed at the manufacturing base before transportation. This is why Technip chose Samkang M&T as a partner from the engineering stage. The floating offshore wind market will open in earnest from the late 2020s. After the Russia-Ukraine war, many European countries have finalized their floating offshore wind installation targets, and the U.S. states of California and Maine have also decided to introduce it. Taiwan, Japan, and Australia also plan to install floating offshore wind. The company's new yard of 500,000 pyeong is highly likely to be dedicated to manufacturing floating offshore wind floating bodies and turbine assembly bases.

Researcher Han Byunghwa of Eugene Investment & Securities analyzed, "With the Taiwan offshore wind order, Samkang M&T has gained a market preemption effect," adding, "Samkang M&T is also ahead in the heavy-weighting of offshore wind foundation structures growing to at least 20MW class, giving it an incomparable competitive advantage and raising expectations for future additional orders."