The Strength of 'Samsung' Gaining New Attention with Bin Salman's Visit to Korea... From Civil Engineering to Hydrogen

Samsung C&T's Stock Fluctuations Amid Governance Changes
Expanding from Civil Engineering to Eco-Friendly Hydrogen Projects
Industry Attention Grows with NEOM City Contract and Proven Expertise

Crown Prince Muhammad bin Salman. (Photo by AFP Yonhap News)

[Asia Economy Reporter Moon Chaeseok] As CEOs of major groups such as Samsung, SK, and Hyundai Motor are reported to meet with Mohammed bin Salman, Crown Prince of Saudi Arabia, the presence of Samsung C&T, Samsung's non-electronics affiliate, is growing. Samsung C&T, previously regarded as an EPC (Engineering, Procurement, and Construction) affiliate whose stock price fluctuated due to issues related to Samsung Electronics Chairman Lee Jae-yong's governance structure, is now highlighted for having a portfolio that includes civil engineering construction as well as new and renewable energy businesses such as hydrogen, drawing increased attention from the industry and financial investment sectors.

According to the industry on the 17th, following Crown Prince bin Salman's visit to Korea, Samsung C&T, an EPC affiliate of Samsung Group, along with Hyundai Engineering & Construction, won a contract worth $1 billion (approximately 1.326 trillion KRW) for the tunnel construction of 'The Line' in Saudi Arabia's NEOM City, attracting attention. The Line is a key infrastructure project within NEOM City, a $500 billion (approximately 663 trillion KRW) project led by Crown Prince bin Salman.

According to the industry, the company recorded a cumulative order amount of about 13.5 trillion KRW by the third quarter, easily surpassing this year's target of 11.7 trillion KRW. It is praised for securing profitable projects such as the Pyeongtaek semiconductor plant and the Taylor Fab in the United States.

In addition to existing civil engineering construction, the company is accelerating its eco-friendly businesses such as hydrogen and solar power generation, SMR (Small Modular Reactor), and battery recycling. Notably, it is reported to be on the verge of signing a memorandum of understanding (MOU) for a green hydrogen and ammonia project with the Saudi Public Investment Fund (PIF), forming a consortium with POSCO and Korea Electric Power Corporation (KEPCO). The project involves constructing a 1.2 million-ton green hydrogen and ammonia plant worth $6.5 billion (approximately 8.6 trillion KRW). Among Korean companies, Lotte Chemical, S-Oil, and Hyosung have been recognized as leading in hydrogen business collaboration with Saudi Arabia. For Samsung, this represents an opportunity to accelerate its eco-friendly new business.

The declaration on the 14th to achieve carbon neutrality by 2050 is raising expectations that it is not merely an ESG (Environmental, Social, and Governance) management guideline announcement but could lead to actual business results. Looking at Samsung C&T's stock price trend, it fell 8.9% from 117,500 KRW at the beginning of the year to 103,500 KRW on September 30 but showed resilience by rising 20.3% to 124,500 KRW in a month and a half. Eun Kyung-wan, a researcher at Shinhan Investment Corp., said, "Samsung C&T's construction division is expected to show differentiated performance trends compared to other construction companies due to its high-tech and overseas factory-centered profit structure."

Meanwhile, according to Samsung Electronics, unlike three years ago just before the meeting between Crown Prince bin Salman and Chairman Lee Jae-yong, no emergency meeting is expected this time between Chairman Lee and the presidents of Samsung's EPC affiliates (Samsung C&T, Samsung Engineering, etc.). A Samsung official said, "As far as we know, no meeting schedule has been set between Chairman Lee and the EPC affiliates, and it probably will not take place."