SK Securities announced on June 4 that it has raised its target price for Samsung C&T from 480,000 won to 590,000 won, reflecting the company's increased equity value, improved business performance, and expectations for enhanced shareholder returns. The investment rating remains at 'Buy.'
Choi Kwan-soon, a researcher at SK Securities, stated in a report that the current discount rate compared to the net asset value (NAV) is 54.6%, indicating strong valuation appeal.
Choi noted that Samsung C&T's current equity value stands at 165 trillion won, comprising 64.5% from Samsung Electronics, 16.5% from Samsung Biologics, and 11.3% from Samsung Life. He explained that while Samsung Biologics' stock price has decreased by 19.4% since the end of last year, Samsung Electronics and Samsung Life have seen their stock prices rise by 196.9% and 204.6%, respectively. Additionally, the company's net debt decreased by 972.7 billion won in the first quarter of 2026 compared to the end of last year, leading to an increase in Samsung C&T's NAV by 75.4 trillion won.
He further emphasized that considering the growth in the high-tech sector and the long-term potential of energy and small modular reactors (SMRs), there is a high likelihood of improved cash flow from operations. He highlighted the importance of focusing on the improvement in operational performance alongside the increase in equity value.
Moreover, Choi pointed out that in February, Samsung C&T announced an increase in its minimum dividend per share to 2,500 won from this year through 2028, and plans to redistribute 60-70% of its affiliate dividend income as part of its shareholder return policy. He added that Samsung Electronics plans to return additional funds after the regular dividend of 9.8 trillion won this year, which is 50% of the total free cash flow (FCF) from 2024 to 2026, if any surplus remains.
Choi projected that the consensus estimate for this year's FCF is 220.9 trillion won, indicating continued expectations for increased dividends from Samsung Electronics. He anticipates that the dividends for the 2027 business year from Samsung C&T, which redistributes 60-70% of its affiliate dividend income, will also increase accordingly.
* This article has been translated by AI.
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