Korea Investment & Securities said on the 9th that Samsung Heavy Industries has the greatest upside potential among the corporations under its industry coverage. It maintained its investment recommendation of 'buy' and raised its target price from the previous 20,000 won to 24,000 won, a 20% increase. The last trading price of Samsung Heavy Industries was 16,750 won.
Kang Kyung-tae, a researcher at Korea Investment & Securities, noted, "Although the operating profit margin for merchant ships in the first quarter (January to March) this year did not meet market expectations, quality balances do not go anywhere, and productivity converges with competitors." He added that he has no doubt regarding the order backlog for individual products and presented Samsung Heavy Industries as the top pick within the industry.
Kang's assessment is that Samsung Heavy Industries possesses independent competitiveness in the merchant ship sector even without armament exports.
He explained, "Samsung Heavy Industries, particularly regarding Floating Liquefied Natural Gas (FLNG) production, storage, and unloading facilities, will maintain a monopolistic position and is in a more comfortable situation compared to competitors that receive valuation premiums based on armament export discussions that cannot be reflected in performance estimates."
Korea Investment & Securities estimated that Samsung Heavy Industries will record a consolidated revenue of 15.2318 trillion won and an operating profit of 2.5485 trillion won in 2028. Performance by product is expected to be 11.6280 trillion won for merchant ships, 2.8838 trillion won for offshore, and 720 billion won for civil engineering.