April 27, 2024

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[THE INVESTOR] Samsung Heavy Industries’ third-quarter earnings were below expectations but its backlog orders are increasing, said eBEST Investment and Securities on Nov. 1 maintaining a “buy” recommendation and 9,000 won (US$7.90) target price. 

Its revenue in the period sank 25 percent on-year to 1.3 trillion won and operating loss came in at 127.3 billion won. This was mainly due to one-off costs including 90 billion won payments after wage negotiations. Taking aside the factor, its operating loss is approximately 60 billion won, in line with market consensus. Its backlog orders also reached 12 trillion won as of end-September and are steadily increasing from before, said analyst Yang Hyeong-mo. 

Although it will remain in the red in the fourth quarter, its current stock price is only at 0.6 times its price-to-book ratio. As the shipbuilding industry is likely to recover next year, investors should focus on growing orders and price rise of vessels, he added. 

By Hwang You-mee (glamazon@heraldcorp.com)