[Click eStock] "Samsung E&A to Acquire Nel Shares for Future Revaluation"

Securing Future Growth Engines
Alleviating Concerns Over Cash Utilization

Samsung E&A's decision to acquire a stake in Norwegian hydrogen company Nel is increasingly being recognized as a well-revaluated investment over time. This is because it goes beyond simple EPC (Engineering, Procurement, and Construction) to resolve uncertainties and secure future growth engines.

On the 13th, Meritz Securities maintained its 'Buy' rating and a target price of 31,000 KRW for Samsung E&A based on this background. The closing price the previous day was 18,550 KRW.

Previously, Samsung E&A became the largest shareholder by acquiring a 9.1% stake in Nel for 47.6 billion KRW. Nel is a world-leading company in producing water electrolysis systems for about 100 years. It possesses technology for both alkaline and polymer electrolyte membrane (PEM) production methods. With business experience in Europe, the United States, and Asia, it is also evaluated to have a fast pace of performance stabilization due to its unique automation system.

The report viewed that although the global water electrolysis installation volume is disappointing compared to expectations five years ago, it is still rapidly increasing, growing 3.7 times mainly centered on China. While hydrogen vehicles and hydrogen turbines show minimal growth, industrial demand such as green ammonia and green methanol is growing. Cooperation between EPC and water electrolysis solution companies when conducting water electrolysis projects is analyzed to be a significant advantage in resolving uncertainties.

Moon Kyung-won, a researcher at Meritz Securities, predicted, "Around 2027, it is expected that through a joint venture (JV), Nel will produce stacks and Samsung E&A will be responsible for balance of plant (BOP), and at that time, Samsung E&A's role will expand beyond simple EPC to ownership and operation (BOO)." He added, "Samsung E&A, which plans continuous investment in developing future growth engines, also resumed dividends for the first time in 12 years starting this year," evaluating that "this trend can alleviate market concerns about cash utilization and resolve undervaluation."