IBK Securities maintained a buy rating for Samsung E&A on June 8 and raised its target price to 60,000 won. The firm cited an expected increase in orders due to expanded semiconductor equipment investments and improved conditions for energy project bids.
Research analyst Jo Jeong-hyeon stated, "Samsung E&A's non-chemical sector is likely to exceed its annual order target of 3 trillion won, potentially reaching over 5 trillion won. The key factor is the scale of Samsung Electronics' P5 investment."
Jo explained that the P5 facility is designed to be a large fab that combines the capacities of the previous P3 and P4 levels, rather than just matching P4. He noted that the demand for high-bandwidth memory (HBM), high-performance DRAM, and eSSD is increasing due to improvements in the memory market and expanded investments in AI servers, necessitating an increase in production capacity among related companies.
He projected that the expansion of P5 investments and streamlined processes will be the source of upward revisions in Samsung E&A's non-chemical order guidance.
Regarding the chemical sector, Jo assessed that geopolitical risks in the Middle East cannot be viewed merely as negative factors. He stated, "The risks from the Iran conflict and the Strait of Hormuz could delay some project bids, but they may also stimulate demand for the restoration and reconstruction of existing energy facilities and increase investments in energy security."
He also anticipated that new order opportunities in the LNG market would expand. Jo remarked, "Amid the diversification of LNG supply chains and the strengthening of energy security, demand for new EPC contracts is rising. If Samsung E&A can address its lack of references, its opportunities for LNG project contracts will also increase."
He added, "Rising memory prices are stimulating an increase in semiconductor equipment investment (CAPEX), while Middle Eastern risks are driving demand for restoration, reconstruction, and LNG supply chain diversification. In a phase where both cash flow and investment justification for clients are improving, Samsung E&A's order guidance remains conservative. When clients open their wallets, Samsung E&A is the first company to show results in numbers."
* This article has been translated by AI.
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