[Click eStock] "Samsung E&A, Expect Better Performance in Chemical Engineering than Petrochemical... Target Price Maintained"

Korea Investment & Securities diagnosed on the 25th that Samsung E&A should expect strong performance in the chemical engineering sector rather than recovery in the non-chemical engineering sector. They maintained a 'Buy' investment rating and a target price of 33,000 KRW.

Samsung E&A reported consolidated sales of 2.317 trillion KRW for the third quarter, a 6.5% decrease compared to the same period last year, while operating profit increased by 32.9% to 203.9 billion KRW. Compared to market expectations, sales fell short by 7.5%, but operating profit exceeded expectations by 8.9%.

Researcher Kang Kyung-tae of Korea Investment & Securities stated, "This is the lowest sales recorded in the last 10 quarters. Although the absolute order backlog is large, there were few sites actually under construction and progressing through the process." He added, "Despite the low sales, operating profit surpassed market expectations. For four consecutive quarters, settlement profits from overseas chemical engineering sites have been generated. This performance reaffirmed the company's capability in executing chemical plant construction projects."

Researcher Kang continued, "The poor performance in the non-chemical engineering sector due to the adjustment in investment timing by key group companies is a problem that must be endured for the time being. This was reflected in actual figures such as a decrease in new non-chemical engineering orders, sales decline, and margin reduction." He concluded, "Ultimately, this is a period where expectations for recovery in the non-chemical engineering sector are limited, and attention must be focused on the strong performance of the chemical engineering sector. We expect to secure large-scale projects worth over 1 billion USD at the Middle East forum next month."