[Edaily Reporter PARK MIN ] On the 19th, NH INVESTMENT & SECURITIES maintained its “Buy” rating and target price of 80,000 won for #SamsungE&A, noting that expectations for improved earnings are growing as the company secures two key growth drivers: expanded domestic semiconductor investment and increased opportunities to win chemical engineering contracts in the Middle East. Based on the closing price of 47,900 won on the 14th, the stock has upside potential of approximately 67% to reach the target price.

In a report published that day, NH INVESTMENT & SECURITIES analyst Lee Eun-sang assessed, “As sales growth from affiliates supplying SamsungElectronics gains momentum, the company is the only one in our coverage to have secured simultaneous domestic and international order momentum, with its order intake expanding to include reconstruction and bypass pipeline projects in the Middle East.” He added, “Further upward revisions to earnings estimates are possible through the securing of high-visibility projects in the Middle East in the second half of the year.”

NH INVESTMENT & SECURITIES projected that SamsungE&A’s order growth, driven by SamsungElectronics’ factory expansions, will gain full momentum. Among the planned factory expansions in Pyeongtaek, Gwangju, and Yongin, the firm estimated that a total of three phases could begin construction by 2027. Considering the scale of SamsungE&A’s past orders for Pyeongtaek P3 and P4, as well as the three-story structure of the new fabs, the order value per phase is estimated at approximately 10 trillion won; the analysis suggests that even accounting for the risk of construction delays, annual orders exceeding 7 trillion won are achievable.

Consequently, SamsungE&A’s new orders for this year are projected to reach 14 trillion won. This represents a 121% increase from last year and exceeds the company’s annual guidance of 12 trillion won. As of the end of the second quarter, the order backlog also stood at 22.676 trillion won, a 24.5% increase compared to the same period last year. Of this, the order backlog in the high-tech industry sector amounted to 7.023 trillion won, a significant increase from the second quarter of last year.

The Gwangju semiconductor cluster is also cited as a source of medium- to long-term order momentum. With the enforcement decree of the Special Act on Semiconductors taking effect on the 11th, priority is being given to the designation of semiconductor clusters outside the Seoul metropolitan area, and a framework has been established whereby the national and local governments can cover 50–100% of the costs associated with the construction and operation of industrial infrastructure. NH INVESTMENT & SECURITIES predicted that construction would begin next year or later, as discussions regarding specific sites in the Gwangju area are currently underway.

Overseas, the firm also offered a positive outlook on expanding order opportunities following the war in the Middle East. NH INVESTMENT & SECURITIES analyzed that while past investments in the Middle East focused on spending surplus funds resulting from high oil prices, the key driver has now shifted to investments aimed at safeguarding against supply chain disruptions. In particular, investments in pipelines bypassing the Strait of Hormuz and related infrastructure are emerging as major candidates for new orders.

In particular, given the national security implications of Middle Eastern energy EPC facilities and the diplomatic interests at stake with major countries, the firm forecast that Korean companies would possess sufficient competitiveness to win these contracts.

Researcher Lee Eun-sang stated, “SamsungE&A was responsible for the construction of a significant number of major energy EPC facilities during the previous Middle East expansion cycle from 2010 to 2012,” adding, “The company is currently conducting preliminary work related to reconstruction projects in Qatar, Kuwait, and Bahrain, and we expect to see concrete results in contract wins within the year. This will serve as an additional factor for upward revisions to earnings estimates.”

In fact, large-scale infrastructure investment projects are underway in the Middle East. The UAE is working to improve the efficiency of the existing ADCOP pipeline and expand its storage capacity, while also pushing forward with the construction of the new ADCOP 2 project, valued at approximately $10 billion. Saudi Arabia is also investing heavily in projects such as the construction of the Twin Petroline as it develops the western Red Sea region into a new energy hub.

NH INVESTMENT & SECURITIES projected SamsungE&A’s revenue for this year at 10.802 trillion won and operating profit at 967 billion won. These figures represent year-over-year increases of 19.6% and 22.0%, respectively. The firm forecasts that this growth trend will continue through 2027, with revenue reaching 12.533 trillion won and operating profit reaching 1.136 trillion won.

This growth trend was also evident in the second-quarter results. SamsungE&A’s second-quarter revenue reached 2.609 trillion won, a 19.8% increase year-over-year, while operating profit rose 51.0% to 273 billion won. The operating profit margin climbed to 10.5%. NH INVESTMENT & SECURITIES estimated third- and fourth-quarter operating profits at 250 billion won and 256 billion won, respectively.

The company’s financial structure is also stable. SamsungE&A’s net debt is expected to reach minus 2.985 trillion won by the end of 2025, placing the company in a net cash position, and NH INVESTMENT & SECURITIES projected that net debt would expand to minus 4.834 trillion won by 2027. Return on equity (ROE) for the same period is expected to be 16.4%.