[Click eStock] "Samsung Engineering, High Investment Attractiveness... Target Price Up"

Target Price Raised by 12% Compared to Previous Estimate

Mirae Asset Securities evaluated Samsung Engineering on the 7th as having the highest investment attractiveness within the industry and raised the target stock price from the previous 34,000 KRW to 38,000 KRW. The investment opinion was maintained as 'Buy.'

Kim Giryong, a researcher at Mirae Asset Securities, stated, "The construction industry continues to face undervaluation and lack of momentum, and a short-term rebound in the housing market and recovery of investment sentiment are expected to be limited. However, Samsung Engineering is judged to have the highest investment attractiveness within the industry due to the recovery of chemical plant orders, expectations for the announcement of shareholder return policies, and a business structure free from housing risks."

It is expected that the absence of chemical plant orders and the decision to withhold shareholder returns, which had been factors causing the stock price decline, will turn into rebound points. Researcher Kim explained, "Regarding chemical plant orders, a contract performance worth $2 billion (approximately 2.667 trillion KRW) to $8 billion is expected from the Saudi Fadhili Gas Project, which was re-tendered on January 6. The possibility of securing orders for Indonesia TPPI ($3.5 billion) and Saudi SAN6 Blue Ammonia ($2 billion) within the first half of the year is also valid."

The social atmosphere of strengthening shareholder returns, such as the government's announcement of a corporate value-up program, is expected to act as a factor reinforcing the justification for Samsung Engineering to resume its shareholder return policy. Researcher Kim said, "One of the reasons for Samsung Engineering's decision to withhold shareholder returns last year was the gap in advance payments (usually 5-10% of the order amount) due to the absence of chemical plant orders and the resulting deterioration in cash flow. The chemical plant order performance in 2024 will have a more significant meaning encompassing the justification for shareholder return demands."