Hanwha Investment & Securities has projected that Samsung E&A will continue to improve its performance this year, driven by stable orders from captive projects and growth in advanced business revenues. The firm raised its target price for Samsung E&A from 63,000 won to 65,000 won while maintaining a "buy" rating.
Song Yu-rim, a researcher at Hanwha Investment & Securities, stated, "This year is expected to be a comfortable year for both orders and performance, thanks to captive projects. Considering the rebound in advanced business revenues and the expansion of orders from affiliates, achieving the annual order target seems feasible."
He added, "For the second quarter, consolidated revenue is projected to reach 2.6 trillion won, with operating profit expected to be 223.7 billion won, marking increases of 17.9% and 23.7%, respectively, compared to the same period last year, aligning with market expectations. We believe the growth in the advanced business (captive) segment is contributing to top-line growth and healthy profit margins."
Song noted that the impact of the situation in the Middle East appears to be limited, explaining, "The Saudi Padhi project, which significantly contributes to revenue, poses no logistics or procurement risks as it is conducted on-site. Similarly, the UAE Taziz project is currently in the module fabrication stage, so it has not yet been affected."
He also mentioned, "With new orders of 4.6 trillion won in the first quarter and an upward revision of order expectations from affiliates, along with the potential for water treatment orders in Saudi Arabia, achieving the annual order target of 12 trillion won seems possible. If large-scale orders, such as the Saudi SAN-6 ammonia project, are added, we can expect an upward revision of the order guidance."
Furthermore, he indicated that there is a possibility of raising revenue guidance depending on the pace of revenue realization in advanced business segments, stating, "Starting next year, LNG and SAF projects are expected to enter the order pipeline, which will continue to enhance order expectations."
* This article has been translated by AI.
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