"The stock price has doubled, but is it still cheap?"...Brokerages say Samsung C&T Corporation is headed to 600,000 won

[Financial News] Brokerages are continuing to issue upbeat forecasts for Samsung C&T Corporation, whose stock has surged more than 100% so far this year. Analysts say the company still has plenty of room to rise further, as expectations for record dividends grow on the back of higher equity values in key affiliates such as Samsung Electronics, while its core businesses in construction and trading continue to post solid results.

According to the securities industry and the Korea Exchange (KRX) on the 20th, Samsung C&T Corporation shares, which had been trading in the 240,000 won range at the start of the year, have nearly doubled in a short period and are now changing hands in the 480,000 to 490,000 won range. Despite the sharp near-term rally, major brokerages have uniformly raised their target prices to above 600,000 won and remain positive on the stock.
DS Investment & Securities and IBK Investment & Securities sharply raised their target price for Samsung C&T Corporation to 620,000 won, while LS Securities lifted its target from 550,000 won to 630,000 won. Shinyoung Securities also kept its target at 600,000 won, backing the ongoing rally.
The main driver that brokerages are highlighting is the enormous value of Samsung C&T Corporation's stakes in its affiliates. The company holds shares in key group companies such as Samsung Electronics, Samsung Life Insurance, and Samsung Biologics, and those holdings account for more than 90% of Samsung C&T Corporation's net asset value. As the stock prices of those core companies have recently moved higher, Samsung C&T Corporation's net asset value is also being strongly re-rated by the market.

The rise in equity value is expected to go beyond simple paper gains and lead to a stronger shareholder-return policy. Samsung C&T Corporation returns 60% to 70% of the dividend income it receives from affiliates to shareholders. It guarantees a minimum dividend per share of 2,500 won and redistributes up to 70% of special dividends generated by Samsung Electronics and Samsung Life Insurance.
The market expects Samsung C&T Corporation's dividend payout to surge from this year through 2028, as Samsung Electronics is likely to pay out a large dividend. DS Investment & Securities estimated that the company's dividend per share this year will jump 720% from a year earlier to 23,050 won, with a dividend yield of about 4.8%. It also forecast that next year's dividend per share could climb to 41,030 won, producing a dividend yield in the 8% range.
Kim Soo-hyun, an analyst at DS Investment & Securities, said, "While the dividend size at SK Square remains uncertain, Samsung C&T Corporation has a clear advantage in predictability with its large dividend. As the market looks for additional returns in the second half, Samsung C&T Corporation's clear dividend policy will be a very attractive option."
Another factor boosting its investment appeal is the broad-based growth across its own businesses, including construction, trading, fashion, and food and beverage. Brokerages are even praising the company as one that has "no ugly fingers," a nod to the strength of its businesses across the board. It is seen as entering a so-called Golden Cross phase, in which both business value and equity value rise at the same time.
The construction division, which serves as the backbone of the company, stands out in particular. With finishing work on Samsung Electronics Pyeongtaek Campus P4 and structural work on P5 set to begin in earnest from the second quarter, annual high-tech orders are expected to far exceed the previous forecast of 6.8 trillion won.
The trading division is also adding momentum through a recovery in industrial materials trading and expansion in renewable energy projects, while the fashion and food and beverage divisions are steadily improving results on the back of recovering consumer sentiment and rising visitor traffic. As equity value lifts the overall net asset value and dividends provide a solid source of shareholder returns, Samsung C&T Corporation's medium- to long-term upside momentum is expected to strengthen further as its core businesses recover alongside the high-tech investment cycle.

moon@fnnews.com Moon Young-jin Reporter