Samsung C&T is surging more than 12% early on the 19th. Buying appears to be gathering as the value of affiliates' equity rises and as achievements in the nuclear power and small modular reactor (SMR) businesses come into focus.
At 9:11 a.m. that day on the Korea Exchange, Samsung C&T was trading at 547,000 won, up 61,500 won (12.67%) from the previous session.
The early-session spike in Samsung C&T appears to have been driven by brokerages that focused on the company's equity value and energy-business momentum and raised their target prices in succession.
LS Securities said that as the value of affiliates' equity increases and results from nuclear power and small modular reactor (SMR) businesses become visible, there is ample room for the stock to rise. It raised the target price to 630,000 won from 550,000 won.
Samsung C&T is pursuing the APR1400 project with Korea Electric Power Corporation and Korea Hydro & Nuclear Power Co. (KHNP), while running AP1000 and CANDU nuclear power projects in collaboration with North American engineering firms.
It is also reviewing business opportunities in Europe and Southeast Asia through strategic partnerships with the global value chain (GVC).
Analysts say that projects under way in Sweden, Estonia, Poland and Finland, including the NuScale project being pursued in Romania and the United States, will form a mid- to long-term order pipeline.
Kim Se-ryeon, an analyst at LS Securities, said, "Samsung C&T's current market capitalization is about 39% below its net asset value (NAV)," adding, "Not only the rise in the value of key affiliates' equity but also a revaluation of the construction division's nuclear power and SMR businesses will act as drivers for the stock."
On the same day, DS Investment & Securities also raised its target price for Samsung C&T to 620,000 won from 380,000 won, citing heightened expectations for dividends.
Samsung C&T will re-distribute 60% to 70% of the dividend income it receives each year from affiliates, including Samsung Electronics and Samsung Life Insurance, from this year—when a large dividend from Samsung Electronics is expected—through 2028. It guarantees a minimum dividend per share (DPS) of 2,500 won and plans to distribute to shareholders up to 70% of any special dividend from Samsung Electronics.
Kim Su-hyun, an analyst at DS Investment & Securities, said, "It will also re-distribute up to 70% of the dividends received from Samsung Life Insurance, the largest shareholder of Samsung Electronics," adding, "Based on our estimates of shareholder-return resources at Samsung Electronics and Samsung Life Insurance, Samsung C&T's dividend per share this year is projected at 23,050 won, up 720% from a year earlier, and 40,130 won next year (dividend yield 8.6%)."