Kyobo Securities on the 24th said Samsung E&A has entered the semiconductor investment cycle and noted the possibility of entering a new energy business in the United States, maintaining a Buy rating. It also raised its target price 106.25% to 66,000 won from 32,000 won. The previous trading day's closing price of Samsung E&A was 50,300 won.
Samsung E&A posted consolidated first-quarter revenue of 2.3 trillion won and operating profit of 188.2 billion won this year.
Kyobo Securities assessed that both Samsung E&A's first-quarter revenue and operating profit slightly missed market expectations (consensus).
This was because construction progress at Samsung Electronics' P5 campus, which had been anticipated, is still at an early stage, so full-scale revenue recognition has not yet taken place. For operating profit, it analyzed that a one-off retirement payment expense reflected in selling, general and administrative expenses led to a slight decline from previous years.
Kyobo Securities projected that Samsung E&A is on the verge of booking large annual projects and that the advanced industry segment can continue to expect orders as affiliates expand CAPEX investments.
Lee Sang-ho, an analyst at Kyobo Securities, said, "Samsung E&A's annual order guidance is petrochemicals (8 trillion won), advanced (2 trillion won), and new energy (2 trillion won), with a medium- to long-term strategy for new energy," adding, "Expectations remain intact for winning large projects in the pipeline such as Mexico methanol ($2.0 billion), Qatar UREA ($2.5 billion), Saudi Khafji ($2.0 billion), and Saudi ammonia ($3.5 billion)."
The analyst added, "It maintains strong capabilities in plants and is planning a new energy business going forward," and "As it newly enters the United States and builds out a medium- to long-term strategy, we give a positive assessment and can also expect good results."