iM Securities raised its target price for Samsung E&A (028050) to 69,000 won from 67,000 won on July 24, representing a 3% increase, while maintaining a 'Buy' rating. Analyst Bae Se-ho cited the acceleration of advanced industry order expansion as the reason for the revision, noting the company's Q2 operating profit of 273.1 billion won exceeded market consensus by approximately 25%. The upward revision reflects Samsung E&A's growing semiconductor-related project pipeline, with the company raising its 2024 advanced industry order target from 3 trillion won to 7 trillion won amid increased investments in semiconductor facilities including the Pyeongtaek P4 and P5 projects.
Samsung E&A Reports Q2 Operating Profit of 273.1 Billion Won
Samsung E&A recorded consolidated revenue of 2.6 trillion won and operating profit of 273.1 billion won in Q2. Operating profit increased 51.0% year-over-year and surpassed market consensus by approximately 25%. The company recognized one-time gains including project settlement profits based on execution capabilities. The advanced industry segment drove the quarterly performance, with revenue of 838 billion won representing a 42.2% year-over-year increase. Rapid construction progress on the Pyeongtaek P4 and P5 projects, driven by expanded semiconductor investments, translated new orders into revenue growth. The gross profit margin (GPM) reached 17.2%, including currency exchange effects from the Hungary project, though the GPM excluding one-time factors was estimated at 11.0%.
iM Securities Raises 2027 EPS and BPS Forecasts
iM Securities increased its 2027 earnings per share (EPS) forecast by 12% and book value per share (BPS) forecast by 2%, citing the heightened probability of increased orders from affiliated companies. Analyst Bae stated that Samsung E&A's new orders in the advanced industry sector could exceed 7 trillion won in 2026 and 8 trillion won in 2027. The analyst designated Samsung E&A as the top pick in the construction sector, noting that external growth in 2027-2028 is visible and investment themes including liquefied natural gas (LNG) and U.S. investments remain valid.
Business Segment Performance Shows Mixed Results
The chemical segment experienced revenue decline as major project schedules were delayed due to the Middle East conflict, though construction is forecast to normalize starting in Q3. The new energy segment is expected to maintain growth momentum in the second half, driven by rising construction rates on the UAE Taziz project and the commencement of the Saudi water treatment project. First-half cumulative new orders totaled 7.6 trillion won, achieving 64% of the annual guidance of 12 trillion won.
Analyst Forecasts 2027 Revenue of 13.3 Trillion Won
Analyst Bae identified semiconductor investment as Samsung E&A's growth engine. The company raised its 2024 advanced industry order target from 3 trillion won to 7 trillion won. Bae stated that advanced industry orders will increase significantly in 2027 due to the start of construction on the remaining Pyeongtaek lines and the Yongin semiconductor cluster, with additional order potential if the southwestern semiconductor cluster materializes. Given the fast revenue recognition characteristic of the advanced industry segment, 2027 revenue is forecast at 13.3 trillion won and operating profit at 1.1 trillion won, representing year-over-year increases of 25.4% and 21.4% respectively. The analyst raised the operating profit forecast by 12% compared to previous estimates.
FAQ
What did iM Securities do on July 24 regarding Samsung E&A?
iM Securities raised its target price for Samsung E&A to 69,000 won from 67,000 won on July 24, a 3% increase, while maintaining a 'Buy' rating. Analyst Bae Se-ho cited the acceleration of advanced industry order expansion as the reason for the revision.
Why did Samsung E&A's Q2 operating profit exceed market expectations?
Samsung E&A's Q2 operating profit of 273.1 billion won exceeded market consensus by approximately 25% due to one-time gains including project settlement profits based on execution capabilities, combined with strong performance in the advanced industry segment driven by rapid construction progress on the Pyeongtaek P4 and P5 semiconductor projects.
How much did Samsung E&A raise its 2024 advanced industry order target?
Samsung E&A raised its 2024 advanced industry order target from 3 trillion won to 7 trillion won. First-half cumulative new orders totaled 7.6 trillion won, achieving 64% of the annual guidance of 12 trillion won.
