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Samsung Heavy Industries’ Shares Surge on Contract Wins and Earnings Improvement


Shares of Samsung Heavy Industries, the South Korean shipbuilder, experienced a significant surge on Wednesday, driven by optimistic expectations of lucrative contract wins and improved earnings.

According to FactSet, the company’s stock rose by as much as 13% to 8,500 won ($6.58) in morning trade, marking its sharpest daily percentage gain in over two years. Meanwhile, the stock benchmark Kospi saw a modest increase of 0.2%.

Analysts in the market have increasingly predicted that Samsung Heavy Industries will exceed its $10 billion target for new contract wins this year.

Nomura analyst Eon Hwang stated in a note on Wednesday that he anticipates Samsung Heavy Industries to secure fresh orders worth $13 billion in 2023. Hwang also believes the company will win contracts for a $3-billion liquefied natural gas project in Qatar and a $2-3 billion Evergreen container ship in the second half of the year.

Similarly, Kyobo Securities analyst Ahn Yu-dong mentioned in a note on Tuesday that he expects Samsung Heavy Industries to achieve total new contract wins of over $12 billion in 2023. He expressed confidence in the company’s bidding activities, as many are already on course to success.

Both Nomura and Kyobo analysts expressed their belief that Samsung Heavy Industries, which returned to profitability in the first quarter after several years of losses, will continue to be profitable through 2023.

CGS-CIMB analyst Yongmin Kim also conveyed in a recent note that the company’s earnings are expected to improve further due to a growing proportion of higher-priced contracts in its revenue mix, projecting continued improvement until 2026.

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