IBK Investment & Securities projected on June 29 that Samsung E&A will benefit from a resurgence in semiconductor investments, leading to a significant expansion in orders. The firm maintained its investment recommendation of "Buy" and a target price of 60,000 won. Analysts believe that the resumption of Samsung Electronics' investment cycle, coupled with large project orders in the second half of the year, will contribute to improved performance.
Researcher Jo Jeong-hyeon estimated that Samsung E&A's consolidated revenue for the second quarter of this year will reach 2.4 trillion won, with an operating profit of 214 billion won. This represents increases of 8.8% and 18.2%, respectively, compared to the same period last year, aligning with market consensus (operating profit of 218.5 billion won). Notably, if the construction of semiconductor factories begins sooner than expected, revenue recognition in the advanced industry sector could accelerate, potentially exceeding market expectations.
IBK Investment & Securities anticipates that the momentum for Samsung E&A's semiconductor orders will be stronger than expected. While the company has set a guidance of 3 trillion won for advanced industry orders, analysts believe that actual annual orders could surpass 6 trillion won. This optimism is based on the resumption of Samsung Electronics' investment cycle and the likelihood of early construction of the P5 Phase 2 production line in Pyeongtaek in July.
In the chemical and new energy sectors, a water treatment project in the Middle East is expected to be the first order momentum. Bid results are anticipated to be announced in the second or third quarter, with the project size estimated at around 1 trillion won. Other major order candidates for the second half include the Saudi SAN-6 ammonia project, Qatar's urea project, and the Mexico blue methanol project. However, considering the timeline for final investment decisions (FID), significant EPC orders for LNG projects are expected to commence in the first half of next year.
Jo noted, "EPC companies' stock prices react most strongly when the client's investment cycle begins," adding that as both the client's cash flow and investment conditions improve, Samsung E&A's current order guidance appears conservative. He concluded, "If actual order increases are confirmed, the stock price is likely to respond strongly."
* This article has been translated by AI.
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