Korea Investment Securities evaluated that Samsung Heavy Industries demonstrated a perfect rebound in the second quarter on the 25th. Korea Investment Securities presented Samsung Heavy Industries as its top pick in the sector, maintaining a target price of 24,000 won.
Samsung Heavy Industries' consolidated revenue for the second quarter this year was 2.683 trillion won, and operating profit was 204.8 billion won. The revenue was at a level similar to market expectations (consensus), but the operating profit exceeded the consensus by 11.8%. Furthermore, this is the first time since the second quarter of 2014 that operating profit has recorded over 200 billion won.
Kang Gyeong-tae, a researcher at Korea Investment Securities, noted, "The driving force behind this quarter's performance was the improvement in sales diversification across commercial vessels and products," adding, "As the proportion of high-profitability businesses increases, profitability is expected to continue improving going forward."
In the institutional sector of commercial vessels, the operating profit margin recorded 6.6% in the second quarter, significantly improving compared to the first quarter (3.8%). This is the result of the proportion of prime vessels ordered before 2022 decreasing to below 20% in commercial vessel revenue. This gap has been filled by prime vessels ordered after 2023.
In the institutional sector of products, the revenue share of high-profitability floating liquefied natural gas production facilities (FLNG) is increasing. FLNG-related projects have a return rate in the lower 10% range, significantly higher than that of commercial vessels.
Researcher Kang stated, "We need to see whether the goal of securing large projects in the second half will be achieved," adding, "In the institutional sector of commercial vessels, 45.5% of the annual goal has been achieved, and FLNG is expected to exceed the annual target as it has contracted more than two out of three projects currently."