Yuanta Securities upgraded its target price for Samsung E&A stocks from 68,000 won to 77,000 won on July 24, representing a 13.2% increase, while maintaining a 'Buy' rating. The brokerage cited Samsung E&A's second-quarter performance that exceeded market expectations, with operating profit surging 51.0% year-over-year to 273.1 billion won and revenue rising 19.8% to 2.6093 trillion won. Yuanta analyst Ryu Tae-hwan projected the engineering and construction company could achieve annual operating profit of 1 trillion won driven by semiconductor-related captive orders and improved margins. The upgrade reflects Samsung E&A's conservative cost management approach and consistent reserve reversals from strong project execution capabilities.
Samsung E&A Records 273.1 Billion Won Operating Profit in Q2 2026
Samsung E&A's second-quarter consolidated revenue reached 2.6093 trillion won, up 19.8% from the same period last year, while operating profit jumped 51.0% to 273.1 billion won. Revenue matched market estimates, but operating profit exceeded analyst projections.
By business segment, the chemical division posted revenue of 1.0732 trillion won, down 17.8% year-over-year. In contrast, the advanced industry segment and New Energy division recorded 838 billion won and 698.1 billion won respectively, surging 42.2% and 146.3%. The growth was driven by semiconductor sector demand and revenue expansion from renewable and eco-friendly projects including UAE Taziz methanol and Malaysia SAF projects.
Gross Profit Margin Rises to 15.8% in Q2 2026
Company-wide gross profit margin (GPM) reached 15.8% in the second quarter, up 0.6 percentage points from the previous quarter. By division, GPM stood at 14.9% for chemicals, 17.2% for advanced industry, and 15.5% for New Energy.
Excluding one-time gains and foreign exchange effects, recurring gross profit margins were 9.6% for chemicals, 11.0% for advanced industry, and 12.9% for New Energy. Yuanta Securities stated it is time to revalue Samsung E&A's recurring margin rate, noting the company applies conservative cost management by preemptively reflecting anticipated risks in costs, with reserve reversals occurring repeatedly based on excellent project execution capabilities.
H1 2026 New Orders Total 7.6342 Trillion Won
Cumulative new orders for the first half of 2026 reached 7.6342 trillion won, achieving 63.6% of the annual guidance of 12 trillion won. Cumulative revenue stood at 4.8767 trillion won (48.8% of the 10 trillion won guidance), while cumulative operating profit was 461.3 billion won (57.7% of the 8,000 billion won guidance).
For the second half of 2026, major order pipelines include SAN-7 ammonia ($3.5 billion), Qatar Urea ($2.5 billion), and Mexico Mexinol ($2 billion). Considering expanded investments from Samsung Electronics and other group affiliates, Yuanta assessed high probability of upward revision to annual performance guidance.
Analyst Projects 1 Trillion Won Operating Profit Achievable in 2026
Yuanta researcher Ryu Tae-hwan stated, "While a conservative approach is needed for orders and revenue from Middle East chemical projects due to ongoing geopolitical uncertainties, achieving annual operating profit of 1 trillion won this year is possible considering the steep increase in captive volume and margin revaluation."
Yuanta's 2026 annual forecast for Samsung E&A projects revenue of 10.7421 trillion won and operating profit of 1.0013 trillion won, significantly exceeding company guidance (revenue 10 trillion won, operating profit 8,000 billion won). Ryu added, "Increased captive volume from Samsung Electronics' semiconductor investment expansion will drive mid- to long-term performance with high profit visibility. Attention should also be paid to expansion of industrial water and water treatment business based on ultrapure water (UPW) technology, as the company is performing the entire EPC process in-house starting with Pyeongtaek P5."
FAQ
What target price did Yuanta Securities set for Samsung E&A stocks on July 24?
Yuanta Securities raised Samsung E&A's target price from 68,000 won to 77,000 won on July 24, representing a 13.2% increase, while maintaining a 'Buy' investment rating.
How much operating profit did Samsung E&A record in Q2 2026?
Samsung E&A recorded operating profit of 273.1 billion won in the second quarter of 2026, up 51.0% year-over-year, exceeding market estimates. Revenue reached 2.6093 trillion won, up 19.8% from the same period last year.
What is Yuanta Securities' annual operating profit projection for Samsung E&A in 2026?
Yuanta Securities projected Samsung E&A could achieve annual operating profit of 1 trillion won in 2026, with full-year revenue forecast at 10.7421 trillion won and operating profit at 1.0013 trillion won, exceeding company guidance of 10 trillion won revenue and 8,000 billion won operating profit.
