Samsung Engineering records 'earnings surprise' in 1Q... Kiwoom raises target price
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Samsung Engineering records ‘earnings surprise’ in 1Q… Kiwoom raises target price

Samsung Engineering recorded an earnings surprise (surprising performance) in the first quarter of this year. It is analyzed that the result was a surprise thanks to the rapid increase in the process rate. Accordingly, the target price has also been raised.

On the 27th, Samsung Engineering announced that it recorded 174.4 billion won in operating profit in the first quarter. This is an increase of 62.6% compared to the same period last year.

Jo Young-hwan, a researcher at Kiwoom Securities, said, “The completion rate is faster than expected, including DBNR (4.5 trillion won) in Mexico (4.5 trillion won), Saudi Hawiya Unaija (2.2 trillion won), and Sarawak (1.3 trillion won) in Malaysia, which received orders from 2019 to 2020. “The non-chemical industry is also rapidly growing in sales in the fourth quarter of last year,” he said. In particular, DBNR and Sarawak are design, procurement, and construction projects with relatively high profitability.

However, Cho also warned that profitability could slightly decline due to raw material prices that have risen sharply since last year. In response, Samsung Engineering said that it is preparing for the risk of price fluctuations by signing futures contracts for some raw materials such as copper and copper, and is offsetting the related impact by using a second-tier company with relatively low prices.

Based on this performance, Kiwoom Securities maintained a ‘buy’ rating on Samsung Engineering and raised its target price from 31,000 won to 32,000 won. Samsung Engineering’s stock price is trading at 25,550 won as of 2:10 pm on the 27th, up 4.07% (1,000 won) from the previous day.

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Reference-www.mk.co.kr

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