[Edaily Reporter Shin Ha-yeon ] On the 29th, HANWHA INVESTMENT & SECURITIES projected that SAMSUNG C&T CORPORATION(028260)would continue to see improved earnings in its construction division, driven by growth in its semiconductor-related high-tech businesses. The firm maintained its “Buy” rating and target price of 520,000 won, citing benefits from expanded investments by affiliates such as SamsungElectronics and the growth potential of its data center and nuclear power plant businesses.

Song Yu-rim, an analyst at HANWHA INVESTMENT & SECURITIES, stated in a report released that day, “While profits across all business segments except biotech improved year-over-year, the growth in the construction segment’s performance was overwhelming.”

SAMSUNG C&T CORPORATION’s third-quarter revenue this year was 12.08 trillion won, and operating profit was 1.1428 trillion won, up 18.3% and 15.0%, respectively, year-over-year. Compared to market consensus, revenue exceeded expectations by 4.3% and operating profit by 13.9%. In contrast, net income attributable to controlling shareholders was 558 billion won, falling 9.8% short of market expectations.

The construction division drove this improvement in performance. Third-quarter construction revenue rose 44.5% year-over-year, with revenue in the building construction segment increasing by 54.7% in particular. Buoyed by this revenue growth, the construction division’s operating profit margin also rose from 3.6% in the third quarter of last year to 6.2% this year.

Analyst Song explained, “Thanks to steep revenue growth, the construction division’s operating profit margin also improved significantly to 6.2%, up from 3.6% in the third quarter of last year.”

The outlook for new orders has also brightened. SAMSUNG C&T CORPORATION announced in a regulatory filing on the 28th that it had raised its guidance for new orders this year from 23.5 trillion won to 30.1 trillion won. Cumulative new orders for the third quarter totaled 19.3 trillion won, and the company has secured a pipeline of over 11 trillion won in new orders for the fourth quarter.

In particular, the expansion of orders in the high-tech sector, such as semiconductor factories, is notable. Although the company set a target of 6.8 trillion won for new high-tech orders at the beginning of the year, cumulative orders for the third quarter alone reached 11.2 trillion won. This figure is close to the all-time high annual order volume of 12.3 trillion won recorded in 2023.

Analyst Song stated, “The company forecasts that high-tech orders will remain robust in 2027 as well, and accordingly, related revenue is expected to increase significantly.”

The nuclear power and data center businesses are also cited as mid- to long-term growth drivers. SAMSUNG C&T CORPORATION is pursuing a project with GVH in Sweden to construct four small modular reactors (SMRs). The company plans to begin front-end engineering and design (FEED) in 2027 and start construction sequentially beginning in 2030. It has also invested $70 million in U.S.-based Kairos Power to secure next-generation SMR technology.

In the large-scale nuclear power sector, the selection of contractors for Units 3 and 4 of the Romanian nuclear power plant is expected in the fourth quarter of this year, and for Vietnam’s Second Nuclear Power Plant next year. In the data center business, the company invested $200 million in “Helix,” a firm established by U.S. private equity firm KKR last September, to secure opportunities for large-scale data center engineering, procurement, and construction (EPC) projects in the United States.

HANWHA INVESTMENT & SECURITIES raised its revenue forecast for SAMSUNG C&T CORPORATION next year by 8.7%, from 49.884 trillion won to 54.248 trillion won. It also raised its operating profit forecast by 6.9%, from 4.325 trillion won to 4.622 trillion won.

Analyst Song commented, “While the stock price is fluctuating due to changes in the value of stakes in affiliated companies, earnings growth driven by high-tech sectors and momentum factors such as data centers and nuclear power plants remain positive.” He further noted that the current stock price corresponds to a 12-month forward price-to-book ratio (PBR) of 0.68 and a price-to-earnings ratio (PER) of 16.