Heungkuk Metaltech Securities analyzed that for Samsung C&T(028260), in addition to even growth across all businesses, a rise in affiliate value is expected. It kept its investment opinion at "Buy (BUY)" and raised the target price to 540,000 won from 450,000 won. The previous trading day's closing price of Samsung C&T was 364,500 won.
Park Jong-ryeol of Heungkuk Metaltech Securities said in a report on the 25th, "Samsung C&T, unlike the previous quarter, will see solid growth in both top line and operating profit across all business divisions," and noted, "There is room for a re-rating through sound results and expanded shareholder returns."
Accordingly, it projected Samsung C&T's third-quarter sales this year at 11.4 trillion won and operating profit at 1.1 trillion won. Those figures are up 12.4% and 12.6%, respectively, from a year earlier.
Heungkuk Metaltech Securities projected that Samsung C&T's third-quarter sales and operating profit this year will come in at 11.4 trillion won and 1.1 trillion won, respectively. Those figures are up 12.4% and 12.6%, respectively, from the same period a year earlier.
By business division, it expected the construction division's profitability to improve as major projects such as the high-tech P4 finishing and P5 frame work enter full swing, and as overseas plant business proceeds smoothly.
In the fashion division, performance is expected to improve as the share of full-price sales increases on an industry upturn. The leisure division is also seen continuing its growth on the back of rising visitors to Caribbean Bay.
In the food and beverage division, performance is expected to improve as the number of diners increases with the expansion of new establishments and as the scale of the food material distribution business grows. The bio division is also expected to maintain solid results, buoyed by full operation of Plants 1–4 and the effect of a stronger exchange rate.
However, it projected that the trading division's results will soften somewhat from the previous quarter due to reduced volumes following the European Union's application of import steel quotas.
Heungkuk Metaltech Securities also projected that as the bio division continues to lead growth this year, improved results across all business divisions—including construction, trading, fashion, leisure, and food and beverage—will further strengthen Samsung C&T's earnings power. It forecast full-year sales and operating profit at 45.9 trillion won and 3.9 trillion won, respectively. Those levels are up 12.7% and 18.6%, respectively, from a year earlier.
In the bio division, it expected continued top-line growth and high profitability supported by a stepwise rise in utilization at Plant 5 and the Rockville, U.S., plant. In the construction division, it saw an expansion of quality orders based on the ramp-up of high-tech project execution, rising global energy demand, and competitiveness in its housing brand. The fashion and leisure divisions are also expected to turn to profit growth as consumer sentiment recovers.
Heungkuk Metaltech Securities cited rising equity values of key affiliates, alongside better results, as another factor lifting Samsung C&T's corporate value. Since late July, as the share prices of major affiliates such as Samsung Electronics(005930), Samsung Life Insurance(032830), 삼성SDS, and 삼성E&A have risen, the value of Samsung C&T's holdings has also increased, it said.
Reflecting this, it raised the net asset value (NAV), which serves as the basis for calculating the target price. It applied a 39% discount to NAV, considering earnings momentum, expanded shareholder returns, and potential improvements in governance.