[Market Focus] Samsung Heavy Industries Surges Over 7% as Analysts Raise Target Prices

Shares of Samsung Heavy Industries are showing strong performance on July 8. This is interpreted as a result of securities firms raising their target prices in succession, fueled by expectations of strong earnings.

As of 9:53 a.m. on this day, Samsung Heavy Industries is trading at 17,420 won per share, up 7.46% from the previous session.

This upward trend is attributed to positive analyst reports released on this day, which suggest that the company’s earnings improvement will continue following strong results in the second quarter. Kang Kyungtae, a researcher at Korea Investment & Securities, stated in a report that Samsung Heavy Industries’ operating profit for the second quarter is expected to exceed consensus by around 8%, and maintained his top buy recommendation for the shipbuilding sector.

Target price upgrades also followed. Lee Jini, a researcher at Daishin Securities, raised the six-month target price for Samsung Heavy Industries by 29.4% to 22,000 won, predicting that the company’s second-quarter operating profit will reach 178 billion won, surpassing consensus estimates.

Han Youngsoo, a researcher at Samsung Securities, also raised his target price from 18,000 won to 20,600 won, citing expectations for momentum from FLNG (Floating Liquefied Natural Gas production, storage, and offloading facilities) orders. Han commented, “FLNG increases the visibility of achieving Samsung Heavy Industries’ order targets this year and enhances investment appeal from a stock perspective.” He added, “In addition to FLNG momentum, the company is differentiated by being unaffected by concerns over a stronger won,” and, “The company is overcoming the limited physical yard capacity through recent collaborations with partners in Vietnam, China, and mid-sized domestic firms.”

Choi Kwangsik, a researcher at Daol Investment & Securities, raised his target price from 19,000 won to 20,000 won. He cited the following reasons: ▲ The company is unaffected by the recent decline in exchange rates due to 100% forward exchange hedging through simultaneous buying and selling, ▲ FLNG orders and their contribution to earnings are becoming more significant, and ▲ There are high expectations for orders of container ships from Asian shipping companies due to the company’s short-term delivery slots. Choi added, “Ship prices are expected to improve sharply in the third quarter,” and “Strong earnings are anticipated as profitability is maintained despite a decrease in operating days.”