[Click e-Stock] "Samsung Heavy Industries, Upward Earnings Trend Driven by Merchant Ships Alone"

Solid Fundamentals in Merchant Ship Business Even Without Naval Vessel Orders

There is analysis suggesting that Samsung Heavy Industries can continue its upward trajectory based solely on its merchant ship business, without the need for additional naval vessel orders.

On June 9, Korea Investment & Securities raised its target price for Samsung Heavy Industries to 24,000 won, an increase of 20.0%, citing this background and naming it the top pick in the shipbuilding sector. The previous trading day's closing price was 16,880 won.

Korea Investment & Securities forecasts that this year, Samsung Heavy Industries will achieve sales of 10.673 trillion won and operating profit of 724 billion won. Compared to the same period last year, this represents an increase of 7.8% in sales and 43.9% in operating profit. The company expects the growth trend to accelerate further, projecting consolidated sales of 15.2318 trillion won and operating profit of 2.5485 trillion won by 2028. By product, it forecasts merchant ships at 11.628 trillion won, offshore at 2.8838 trillion won, and construction at 720 billion won.

The analysis particularly focused on the fundamental strength of the merchant ship segment, highlighting a high-quality order backlog and outstanding productivity. It also noted that the company's order-taking capability by product remains robust. In particular, the company is expected to maintain an almost monopolistic position in the floating liquefied natural gas production, storage, and offloading (FLNG) sector.

Kang Kyungtae, a researcher at Korea Investment & Securities, stated, "The company's fundamentals are solid. While we will adjust our estimates if the timing of orders by product changes, we are comfortable compared to competitors who receive valuation premiums based on naval vessel export stories that cannot be reflected in earnings estimates."