"Samsung Heavy Industries Expected to Benefit from LNG and FLNG Hedging Effects"...Target Price Set at 37,000 Won

[Financial News] IBK Investment & Securities initiated coverage of Samsung Heavy Industries with a 'Buy' rating and set a target price of 37,000 won.
On the 15th, Jang Seong-ho, an analyst at IBK Investment & Securities, explained, "We recommend buying Samsung Heavy Industries because its business portfolio is highly stable, as the company builds both LNG carriers and floating liquefied natural gas (FLNG) facilities." 
Jang said, "Although the two businesses are part of the LNG value chain, their investment cycles differ, so they are expected to hedge risks in the LNG market." He added, "This is an advantage that only Samsung Heavy Industries, with its unrivaled capabilities in building FLNG facilities, can enjoy."
The momentum for LNG carrier orders is expected to gain full strength from the 2030 construction slots, or docks. Jang explained, "Large-scale expansions of LNG liquefaction plants are scheduled, mainly in the United States. As commercial operations begin in earnest next year, strong LNG carrier orders are expected for the 2030 dock slots." He added, "Global LNG production capacity is projected to reach 820 million tons in 2031, up 54.2% from 2025, with 44.2% of the expansion coming from the United States."
He added, "Although there are concerns about a short-term oversupply of LNG carriers, this could accelerate the scrapping of older vessels with low fuel efficiency. Therefore, we forecast that the market will reach a supply-demand turning point in 2030."
Jang said, "FLNG orders are expected to continue steadily. Global LNG demand is projected to keep rising, led by emerging Asian countries, while the investment costs of FLNG projects have fallen to levels comparable to those of onshore plants." He added, "As FLNG projects expand, Samsung Heavy Industries is highly likely to capture most of the benefits."
Samsung Heavy Industries has an unrivaled construction track record, having won seven of the 11 global newbuild FLNG orders. In particular, it is the only company to have built new large-scale FLNG facilities with capacity of more than 3 million tons. 


[email protected] Joo Won-gyu Reporter