[Click eStock] Samsung ENG Achieves 'Best Performance in 10 Years', Target Prices Raised One After Another

[Asia Economy Reporter Son Sun-hee] On the 1st, multiple securities firms raised their target prices for Samsung Engineering one after another. This is due to the company achieving its best performance in 10 years last year and expectations for profitable new orders this year.

Daishin Securities raised the target price for Samsung Engineering from 37,000 KRW to 41,000 KRW, an increase of 10.8%, on the same day. This is the highest level among the target prices currently suggested by securities firms.

Lee Tae-hwan, a researcher at Daishin Securities, said, "Despite having a record-breaking year, growth is not expected to end yet," adding, "There are several pending matters for negotiated contracts in the petrochemical sector, including UAE Hail and Gasha, Saudi NEC, and Turkey PDHPP, as well as multiple projects in Indonesia ethylene, Saudi Jafurah 2, and Indian petrochemicals. The non-petrochemical sector is also expected to see steady affiliate investments, making the visibility of order achievement high."

Samsung Engineering achieved annual sales (consolidated basis, provisional) of 10.0543 trillion KRW last year, a 34.3% increase compared to the previous year. Operating profit rose 39.7% to 702.9 billion KRW, and net profit increased 69.6% to 595.3 billion KRW. This is the best performance in 10 years since 2012.

Korea Investment & Securities also raised the target price for Samsung Engineering from 33,000 KRW to 38,000 KRW, a 15.2% increase, on the same day. Kang Kyung-tae, a researcher at Korea Investment & Securities, explained, "What was more impressive than the new order target of 12 trillion KRW was the 2023 operating profit target," adding, "There are not enough EPC (Engineering, Procurement, and Construction) companies capable of performing large-scale construction projects on schedule compared to the increasing volume of construction orders. Therefore, the company’s ability to select and bid on profitable projects and maintain target margins by segment will be a driving force."

In addition, several securities firms also raised their target prices for Samsung Engineering to the high 30,000 KRW to low 40,000 KRW range, including Hana Securities from 36,000 KRW to 40,000 KRW, Shinhan Investment Corp. from 32,000 KRW to 36,000 KRW, and Meritz Securities from 32,000 KRW to 35,000 KRW.