KOSPIShipbuilding010140

Samsung Heavy Industries

₩19,930▲ 1.06%2026-10-02 close

Market Cap

₩17.6T

Turnover

₩37.5B

Volume

1.9M

Shares out.

880M

PER

33.3×

PBR

3.8×

EPS

₩642

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

FLNG-Driven Margins, Next Test Is Order Conversion

Having exited its loss-making structure, Samsung Heavy Industries has pushed quarterly operating margins to around double digits on rising LNG carrier and FLNG revenue recognition, and the key thing to watch now is whether large offshore projects still under negotiation convert into disclosed contracts.

1
Annual results reversed direction entirely, from an operating loss of KRW 854.4bn in 2022 to operating profit of KRW 862.2bn in 2025, with revenue expanding from KRW 5.94tn to KRW 10.65tn.
2
Second-quarter 2026 revenue of KRW 3.23tn and operating profit of KRW 325.0bn lifted the operating margin to about 10%, and the company noted a one-off cost of KRW 25.0bn tied to a change in severance-pay calculation.
3
Management guided to 2026 revenue of KRW 12.8tn and an order target of USD 13.9bn (USD 5.7bn commercial ships, USD 8.2bn offshore), with January-July new orders tallied at USD 10.0bn.
4
The company has won 7 of the 11 large newbuild FLNG units ordered globally, and in June 2026 secured the U.S. Delfin unit 1 (KRW 4,330.1bn) and an African owner's FLNG (KRW 3,653.6bn) back to back.
5
On the other hand, dividends have been suspended since 2014 and an accumulated deficit remains, so the timing of any resumption of shareholder returns has not yet been confirmed through disclosure.

Business structure

Samsung Heavy Industries is a shipbuilder and offshore contractor centered on its Geoje yard, with commercial shipbuilding and offshore facilities such as FLNG as its two pillars.

The commercial ship business builds LNG carriers as its core product, alongside crude carriers, container ships, gas carriers and ethane carriers. Orders booked in 2026 comprised 34 vessels in total: 14 LNG carriers, 2 ethane carriers, 4 gas carriers, 2 container ships and 12 crude carriers.

The offshore pillar centers on FLNG units that liquefy, store and offload gas at sea, and the company states that, starting with Shell's Prelude, it has won 7 of 11 newbuild FLNG units for a share of about 64%.

As of June 2026 the company said three large units were under simultaneous construction at Geoje: Malaysia's ZLNG, Mozambique's Coral Norte and Canada's Cedar.

Customers split between global shipowners and energy developers or traders, and the Delfin project marked a case in which a private developer, rather than an oil major or state company, partnered with the shipyard to develop an FLNG.

In new businesses the company is pursuing floating data centers (FDC): it obtained approval in principle for a 50-megawatt FDC design from ABS of the United States and Lloyd's Register of the United Kingdom, and signed a power-system technology tie-up with ABB and a development memorandum with Mousterian of the United States.

Competitively, the HD Korea Shipbuilding group and Hanwha Ocean form the domestic axis while large Chinese yards compete on volume, leaving Samsung Heavy positioned in LNG and gas carriers on the commercial side and FLNG on the offshore side. Segment revenue mix requires disclosure verification, so no figures are presented here.

Earnings trend

Quarterly revenue · Operating profit

₩2.7T₩204.8B25Q2₩2.6T₩238.1B25Q3₩2.8T₩296.2B25Q4₩2.9T₩273.1B26Q1₩3.2T₩325B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩5.9T-₩854.4B2022₩8T₩233.3B2023₩9.9T₩502.7B2024₩10.7T₩862.2B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩2.7T	₩204.8B	7.6%
2025Q3	₩2.6T	₩238.1B	9.0%
2025Q4	₩2.8T	₩296.2B	10.4%
2026Q1	₩2.9T	₩273.1B	9.4%
2026Q2	₩3.2T	₩325B	10.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩5.9T	-₩854.4B	-₩619.4B	−14.4%	−17.2%	305.7%
2023	₩8T	₩233.3B	-₩148.3B	2.9%	−4.3%	357.4%
2024	₩9.9T	₩502.7B	₩63.9B	5.1%	1.7%	358.6%
2025	₩10.7T	₩862.2B	₩545.5B	8.1%	13.1%	265.0%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The annual trajectory is clear.

From 2022 revenue of KRW 5,944.7bn with an operating loss of KRW 854.4bn (-14.4% margin), results turned positive in 2023 with revenue of KRW 8,009.4bn and operating profit of KRW 233.3bn (2.9%), then expanded for three straight years to KRW 9,903.1bn and KRW 502.7bn (5.1%) in 2024 and KRW 10,650.0bn and KRW 862.2bn (8.1%) in 2025.

Net profit attributable to owners moved from minus KRW 148.3bn in 2023 to KRW 63.9bn in 2024 and KRW 545.5bn in 2025.

Operating cash flow also flipped, from minus KRW 1,693.0bn in 2022 and minus KRW 516.5bn in 2023 to KRW 654.5bn in 2024 and KRW 1,562.8bn in 2025, while the debt-to-equity ratio fell from 358.6% in 2024 to 265.0% in 2025.

Quarterly, revenue rose from KRW 2,683.0bn in 2Q25 to KRW 3,230.7bn in 2Q26, and operating profit ran KRW 204.8bn, KRW 238.1bn, KRW 296.2bn, KRW 273.1bn and KRW 325.0bn, lifting the margin from the 7% range to about 10%.

The company attributed the second-quarter 2026 improvement to the ramp-up of global operations production and the resumption of launches at dock No. 2.

Second-quarter operating profit also carried a one-off cost of KRW 25.0bn arising when target-achievement incentives were classified as wages and reflected in severance-pay calculations.

Net profit attributable to owners, however, slid from KRW 214.1bn in 2Q25 to KRW 97.3bn in 4Q25 and KRW 101.6bn in 1Q26 before rebounding to KRW 224.3bn in 2Q26, showing greater volatility than the operating profit trend.

For first-half 2026, cumulative revenue was KRW 6,133.0bn with operating profit of KRW 598.1bn, and the company expected its full-year revenue guidance of KRW 12.8tn, set at the start of the year, to be comfortably met.

Industry analysis

The end market is in a phase where expanding LNG projects drive shipbuilding demand. Wood Mackenzie analyzed that shipbuilding capacity could become a bottleneck as global LNG production expands, with more than 260 LNG carriers scheduled for delivery after 2027, most of them concentrated in Korea and China.

Prices are drifting sideways at high levels after a surge. Clarksons Research's newbuilding price index climbed from 161.8 in 2022 to 189.2 in 2024, then paused at 184.7 in 2025 and 185.2 in June 2026. The newbuilding price for a 174,000-cubic-meter LNG carrier held around USD 248.5m per vessel as of August 7, 2026.

On competition, docks at major Chinese yards have filled up after Korea's, reshaping the market into one of selective ordering where yards can pick work, and Korean builders claiming advantages in delivery and quality are seen as relative beneficiaries.

Still, shrinking global order volumes, slower labor supply and China's pursuit remain flagged as shadows over the industry.

On cycle positioning, Korean builders hold roughly 3.5 years of work and continue selective ordering, with delivery slots filled through 2028 and prices that rose after 2023 now feeding into 2026 results.

Samsung Heavy's relative position is concentrated in FLNG and LNG or gas carriers, unlike Hanwha Ocean with its large defense weighting or the HD Hyundai group spanning engines and special vessels; project sizes are larger but order intake can swing more sharply with the timing of individual contracts.

Outlook

Management's 2026 targets center on growth toward revenue of about KRW 12.8tn along with expanded order intake, and the annual order goal is USD 13.9bn, split into USD 5.7bn for commercial ships and USD 8.2bn for offshore.

On progress, new orders from January through July 2026 reached USD 10.0bn, and commercial ship orders passed the USD 5.7bn annual target with USD 5.8bn cumulative in early August. Offshore, by contrast, stood at USD 4.4bn or 54% of target, and the company plans to fill the gap by winning one FLNG each from the U.S.

Delfin unit 2 and Canada's Western project in the second half. Having built Delfin unit 1, Samsung Heavy holds priority rights on additional orders for units 2 and 3, and MidOcean Energy joined unit 2 as a major investor and partner.

On the new-business calendar, the company set second-quarter 2028 as the service-readiness point for its first commercial floating data center.

Its contract with Mousterian of the United States covers basic and detailed design for a 50-megawatt FDC to be deployed in Texas and other locations, with engineering, procurement and construction contracts to be signed separately.

Ultimately, the earnings path hinges on managing progress and costs on the three FLNG units already secured and on whether contracts under negotiation convert into actual disclosures.

Valuation

PER

33.3×

PBR

3.8×

ROE

13.4%

EPS

₩642

BPS

₩5,589

Dividend per share

₩0

Earnings-based multiples are hard to compare directly with past phases when the shipbuilding industry swung between losses and thin margins, and because profits over the last four quarters recovered sharply, the pace of change in the denominator drives how the multiple reads.

Relative to net assets the shares trade at a premium level, which can be read as the market pricing in expectations that the secured FLNG and LNG carrier backlog will convert into future profits.

On dividends, the company has paid none since 2014 and has stated a goal of resuming payouts once distributable profit is secured, referencing its past payout ratio and comparable industries, which limits sector dividend comparisons.

It is also worth noting that the accumulated deficit stood at KRW 1,501.3bn as of the first quarter of 2026, down from KRW 2,043.9bn a year earlier but still constraining dividend capacity.

As for brokerage views, Sangsangin Investment & Securities said in a July 2026 report that it maintained a buy rating and a target price of KRW 43,000.

In addition, DS Investment & Securities assessed that a ramp-up in FDC orders would allow diversification of the vessel-type portfolio, while other views hold that considerable time may be needed before the market scales up and stable profitability is secured.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Revenue growth and margin improvement together

Quarterly revenue rose from KRW 2,683.0bn in 2Q25 to KRW 3,230.7bn in 2Q26, while operating profit increased from KRW 204.8bn to KRW 325.0bn, lifting the margin to about 10%. On an annual basis the margin stepped up from 2.9% in 2023 to 5.1% in 2024 and 8.1% in 2025.

The company cited the ramp-up of global operations production and the resumption of launches at dock No. 2 as drivers. Operating cash flow also turned to inflows of KRW 654.5bn in 2024 and KRW 1,562.8bn in 2025.

Track record in the FLNG market

The company says it has won 7 of 11 newbuild FLNG units, a share of about 64%. In June 2026 it booked one FLNG for the Delfin project at KRW 4,330.1bn and then signed an FLNG contract worth KRW 3,653.6bn with an African owner, together approaching KRW 8tn.

The company is negotiating follow-on units in the Delfin series and has emphasized that it leads series construction while executing the entire EPC scope on its own. With each unit worth trillions of won, a single contract moves the backlog materially.

Floating data centers as a new option

The company obtained approval in principle for a 50-megawatt FDC from ABS of the United States and Lloyd's Register of the United Kingdom.

It subsequently signed an engineering contract with U.S. data center developer Mousterian for FDC construction in the United States, following on from an April memorandum of understanding.

It also signed memoranda with Greek owner Capital and Lloyd's Register, under which Samsung Heavy handles technology development and construction, Capital sources projects and invests, and LR supports rules and standards.

The effort applies large floating-structure design and cooling and power integration skills built up in FLNG, an area where existing facilities and workforce can be leveraged.

Bear factors

Risk that offshore orders stay stuck in negotiation

Offshore orders stood at USD 4.4bn, only about 54% of target. The company said it is negotiating contracts for Delfin units 2 and 3, but negotiations and priority rights are not the same as a disclosed contract.

Because each FLNG contract runs into trillions of won, a delay in even one or two can swing the annual order achievement rate sharply. The structure depends on owners' final investment decisions and financing timelines.

Flat vessel prices and Chinese competition

The newbuilding price index peaked at 189.2 in 2024 and then paused at 184.7 in 2025 and 185.2 in June 2026. Some brokerage views argue that with commercial vessel prices rising only modestly, the quality of the backlog needs to improve.

Falling global order volumes, slower labor supply and China's pursuit are cited as burdens on the industry. If prices stagnate, newly booked work may add less lift to future margins.

Absence of shareholder returns and net profit volatility

The company has paid no dividend since 2014. Its corporate governance report notes that there was not a single voluntary disclosure of a value-up plan between January 2025 and May 2026.

Net profit attributable to owners is choppier than operating profit, sliding from KRW 214.1bn in 2Q25 to KRW 97.3bn in 4Q25 and KRW 101.6bn in 1Q26 before returning to KRW 224.3bn in 2Q26. The debt-to-equity ratio fell to 265.0% in 2025, but the absolute level remains high.

Risk factors

Project execution and cost risk

Three large FLNG units, ZLNG, Coral Norte and Cedar, are under simultaneous construction at Geoje, which raises the difficulty of schedule management. For offshore facilities, design changes and schedule slippage feed directly into costs, and Samsung Heavy's past large losses also originated in offshore projects.

In the second quarter of 2026 a one-off cost of KRW 25.0bn arose from a change in severance-pay calculation. Steel plate prices, exchange rates and subcontractor labor supply are additional variables that can affect quarterly margins.

Uncertainty over new-business commercialization

The Mousterian contract covers the design phase, with EPC contracts to be signed separately.

One brokerage analyst said FDC is at an early stage of moving from theory to implementation, requires further verification of scale and stability versus land-based data centers, is unlikely to deliver meaningful profitability early on, and may take years to show up in earnings.

There are also concerns that if the scope stays limited to fabricating the floating platform, more of the value could accrue to suppliers of power generation equipment, servers and cooling systems. Port, environmental, grid and telecom regulations must also be reviewed in parallel.

Financial and capital policy risk

An accumulated deficit of KRW 1,501.3bn remained as of the first quarter of 2026, constraining dividend capacity. The company posted operating losses for about eight consecutive years from 2015 to 2022 on distressed drillship inventory, offshore plant problems and low-price orders.

The debt-to-equity ratio fell from 357.4% in 2023 and 358.6% in 2024 to 265.0% in 2025 but remains elevated, and if the profit recovery stalls, balance-sheet repair could slow with it. On governance, the report notes that the chief executive also serves as chairman of the board.

What to watch next

Late October 2026
Preliminary third-quarter 2026 results. Key checks are whether the operating margin, which reached about 10% in the second quarter, holds on a base without one-off costs, and how revenue progress tracks against the KRW 12.8tn full-year guidance.
Fourth quarter of 2026
Whether the FLNG units the company targeted for the second half, one each from the U.S. Delfin unit 2 and Canada's Western project, appear as signed contracts. It matters to distinguish an actual sales and supply contract disclosure from negotiations or priority rights.
Year-end 2026 to January 2027
The final achievement rate against the USD 13.9bn annual order target and the release of 2027 revenue and order guidance. The mix between commercial ships and offshore, plus the price levels secured under a selective ordering stance, provide the basis for gauging future margin direction.
Around February 2027
Confirmation of full-year 2026 results along with disclosures on progress in reducing the accumulated deficit and any resumption of dividends. The company has stated a goal of resuming dividends once distributable profit is secured, so it is worth verifying whether capital policy changes actually appear in disclosures.
First half of 2027 onward
Whether the floating data center design contract converts into an EPC contract and whether the schedule holds for the second quarter of 2028, cited as the service-readiness point for the first commercial FDC. Until contract form and value are confirmed in disclosures, any earnings contribution cannot be assumed.

Overall view

Samsung Heavy Industries' confirmed results moved from an operating loss of KRW 854.4bn in 2022 to operating profit of KRW 862.2bn in 2025, with revenue rising from KRW 5,944.7bn to KRW 10,650.0bn and operating cash flow turning to inflows.

Quarterly, second-quarter 2026 revenue of KRW 3,230.7bn and operating profit of KRW 325.0bn brought the margin to about 10%, and this included a one-off cost of KRW 25.0bn from a change in severance-pay calculation.

On orders, commercial ships had already exceeded the annual target by early August, while offshore remained at about 54% of target, making the conversion of large FLNG contracts into disclosures the crux of full-year target achievement.

The industry backdrop is one in which filled docks in Korea and China have reshaped the market toward selective ordering, yet the newbuilding price index has drifted sideways since its 2024 peak.

In the new floating data center business, classification approval and a design contract have been achieved, but an EPC contract still needs to be signed separately. Financially, the debt-to-equity ratio fell to 265.0% in 2025, yet an accumulated deficit remains and dividends have not resumed.

The bullish case rests on margin improvement and FLNG competitiveness, the bearish case on delayed order conversion, flat vessel prices and the absence of shareholder returns; this report is for information purposes and contains no buy or sell opinion.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.