[Edaily Reporter Kim Kyung-eun ] KB Securities raised its target price for SAMSUNG C&T CORPORATION(028260)by 25% to 490,000 won, reflecting the company’s expansion of its nuclear power business and the potential for its valuation discount to narrow. The firm maintained its “Buy” rating.

Jang Moon-jun, an analyst at KB Securities, stated, “The target price is based on a 12-month forward price-to-book (P/B) ratio of 1.5x and a price-to-earnings (P/E) ratio of 29.8x,” adding, “We lowered the target net asset value (NAV) discount rate from 45% to 40% and factored in the increased value of the company’s equity holdings.”

Analyst Jang commented, “While SAMSUNG C&T CORPORATION’s stock price was significantly influenced by changes in the value of its equity holdings during the first half of this year, going forward, we can expect not only a simple increase in the value of those holdings but also a narrowing of the discount rate.” He added, “This marks the first year of renewed growth in both revenue and profit, and meaningful expansion in the nuclear power business is set to begin in earnest.”

The firm projected that second-quarter earnings would meet market expectations. SamsungSecurities estimated SAMSUNG C&T CORPORATION’s second-quarter revenue at 11.1 trillion won and operating profit at 858.3 billion won. This represents year-over-year increases of 10.4% and 14.2%, respectively. The firm analyzed that balanced revenue growth across all business divisions would drive the improvement in earnings.

In particular, the firm highlighted the expansion of the nuclear power business within the construction division. Analyst Jang noted, “In the Small Modular Reactor (SMR) sector, the company is pursuing projects with leading 3.5-generation SMR developers—NuScale and GE Vernova-Hitachi (GVH)—without relying on any specific technology provider,” and “This appears to be a strategy to become the most flexible EPC (Engineering, Procurement, and Construction) company capable of responding effectively to any reactor type should the SMR market expand in the future,” he explained.

He went on to assess, “While the company currently appears more active in the SMR sector than in large-scale nuclear power, it is highly likely to become the first choice for customers should the large-scale nuclear power market expand in the future.”

He assessed, “The reason South Korea has secured competitiveness in the global nuclear power industry is that it is virtually the only free-world nation that has built nuclear power plants extensively, skillfully, and consistently—even overseas,” adding, “The foundation of this competitiveness lies in the experience gained from the Barakah Nuclear Power Plant project in the United Arab Emirates (UAE), which was jointly executed by HyundaiEngineering&Construction and SAMSUNG C&T CORPORATION.”