Samsung Heavy Industries' stock price jumped more than 10% during intraday trading on the 19th. The U.S. imposed sanctions on the Wison shipyard in China last month, which seems to have stimulated investor sentiment with expectations that Samsung Heavy Industries will lead the floating liquefied natural gas (FLNG) market.
Samsung Heavy Industries' stock traded at 14,920 won on the KOSPI market at 2:10 p.m. on the 19th. The stock price rose by 15.39% (1,990 won) compared to the previous day. During intraday trading, the stock reached as high as 15,220 won, setting a new record high not seen in 10 years since March 2015.
The rise in Samsung Heavy Industries' stock price is tied to U.S. liquefied natural gas (LNG) exports. This is because it is expected that demand for LNG carriers as well as FLNG will increase following the Donald Trump administration's approval of LNG exports.
FLNG is a complex offshore facility that extracts and refines natural gas at sea, then converts it into LNG for storage and unloading. It is also referred to as an LNG factory on the sea.
Samsung Heavy Industries is the market leader in the FLNG sector. Notably, excluding Samsung Heavy Industries, only the Wison shipyard has been constructing FLNGs worldwide, and U.S. government sanctions have expanded Samsung Heavy Industries' foothold.
Industry analysts believe that in addition to the Delfin FLNG units 1 to 4 in the U.S. and the Western FLNG in Canada, Samsung Heavy Industries is likely to secure orders for the entire FLNG pipeline in Africa, Mexico, and Suriname.
According to financial information provider FnGuide, brokerage firms have set an average target price of 17,820 won for Samsung Heavy Industries. This is 19.4% (2,900 won) higher than the current stock price.