KOSPIConstruction & Materials028050

Samsung E&A

₩47,800▲ 0.95%2026-10-02 close

Market Cap

₩9.4T

Turnover

₩49.9B

Volume

1.1M

Shares out.

200M

PER

13.6×

PBR

1.8×

EPS

₩3,383

Dividend Yield

1.72%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩790 per share · Prices as of the 2026-10-02 close

Report overview

Order Recovery Meets an Advanced-Industry Revenue Gap

After two years of retreat from the 2023 peak, quarterly profits recovered in the first half of 2026, and the durability of that recovery hinges on converting the large hydrocarbon and new-energy pipeline into signed contracts and on a restart of affiliate semiconductor orders.

1
2025 revenue of 9.029tn won and operating profit of 792.1bn won were below 2023 levels (10.625tn won and 993.1bn won), but Q2 2026 revenue of 2.609tn won and operating profit of 273.1bn won show restored quarterly earnings power.
2
Q1 2026 new orders reached 4.63tn won, up 91.4% year on year, and the company reported 3tn won of Q2 orders with a 22.7tn won backlog, which it described as roughly 2.5 years of work.
3
The company reorganized into three units in early 2026, and first-half segment revenue was 2.20tn won for hydrocarbon, 1.41tn won for advanced industry and 1.26tn won for new energy.
4
Customer and regional concentration remains a key variable: Saudi Aramco accounted for 31.4% and Samsung Electronics 22.0% of 2025 revenue, and 56% of the backlog sits in the Middle East and North Africa.
5
The debt-to-equity ratio fell from 204.6% in 2022 to 125.8% in 2025, while the payout ratio rose to about 25%, above the stated three-year shareholder return range of 15-20%.

Business structure

Samsung E&A, founded in 1970, is a plant engineering and EPC contractor that provides feasibility studies, financing, design, procurement, construction, commissioning, operations and maintenance and project management across oil and gas processing, refining, petrochemicals, industrial, environmental, bio and energy transition areas.

In early 2026 it reorganized from a two-way hydrocarbon/non-hydrocarbon structure into three units - hydrocarbon, advanced industry and new energy - following its 2023 mid-term strategy announcement and 2024 name change.

By scale, first-half 2026 segment revenue was 2.2031tn won for hydrocarbon, 1.4122tn won for advanced industry and 1.2614tn won for new energy, a relatively even spread.

Hydrocarbon work is driven mainly by Middle East national energy companies, advanced industry centers on affiliate semiconductor and bio facilities, and new energy covers methanol, ammonia, hydrogen and water treatment plants.

The customer base is clearly concentrated: Samsung Electronics represented 22.04% of 2025 revenue (1.9899tn won), while Saudi Aramco ranked first at 31.43%.

Among projects in progress, the Fadhili gas project had a remaining backlog of 5.794tn won with completion scheduled for September 2027, and Pyeongtaek P4, the largest advanced-industry job, had 2.7128tn won remaining with completion due in December 2027.

However, as the Samsung Electronics share fell from 27.7% in 2024 to 22.0% in 2025, advanced-industry revenue also shrank from 4.5936tn won to 2.5312tn won.

In competitive terms the company is seen as holding one of the deepest Middle East track records among Korean contractors, and iM Securities analyst Bae Se-ho has argued that with only a handful of EPC firms still operating continuously in the region, Samsung E&A would show the strongest competitiveness among Korean builders if regional reconstruction accelerates.

Earnings trend

Quarterly revenue · Operating profit

₩2.2T₩180.9B25Q2₩2T₩176.5B25Q3₩2.8T₩277.4B25Q4₩2.3T₩188.2B26Q1₩2.6T₩273.1B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩10.1T₩702.9B2022₩10.6T₩993.1B2023₩10T₩971.6B2024₩9T₩792.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩2.2T	₩180.9B	8.3%
2025Q3	₩2T	₩176.5B	8.8%
2025Q4	₩2.8T	₩277.4B	10.1%
2026Q1	₩2.3T	₩188.2B	8.3%
2026Q2	₩2.6T	₩273.1B	10.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩10.1T	₩702.9B	₩664.9B	7.0%	24.7%	204.6%
2023	₩10.6T	₩993.1B	₩753.8B	9.3%	21.7%	136.5%
2024	₩10T	₩971.6B	₩756.9B	9.7%	17.9%	157.0%
2025	₩9T	₩792.1B	₩617.5B	8.8%	13.0%	125.8%

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 pattern is one of expansion followed by adjustment. Revenue slipped for two consecutive years, from 10.054tn won in 2022 and 10.625tn won in 2023 to 9.967tn won in 2024 and 9.029tn won in 2025, while operating profit eased from 993.1bn won in 2023 and 971.6bn won in 2024 to 792.1bn won in 2025.

Still, the operating margin improved from 7.0% in 2022 to 9.3% in 2023 and 9.7% in 2024 before settling at 8.8% in 2025, leaving the margin level above where it stood in 2022.

Owners' net profit fell from 753.8bn won in 2023 and 756.9bn won in 2024 to 617.5bn won in 2025, while the debt-to-equity ratio trended down over the same stretch: 204.6% in 2022, 136.5% in 2023, 157.0% in 2024 and 125.8% in 2025.

Operating cash flow swung from negative 459.8bn won in 2023 to positive 1,635.8bn won in 2024 before narrowing to 254.4bn won in 2025, illustrating how sensitive large EPC cash flows are to advance payments and milestone collections.

Quarterly, the trough was Q3 2025 at 1.996tn won of revenue and 176.5bn won of operating profit, followed by 2.757tn won and 277.4bn won in Q4 2025, 2.267tn won and 188.2bn won in Q1 2026, and 2.609tn won and 273.1bn won in Q2 2026.

The quarterly operating margin rose from 8.3% in Q1 2026 to 10.5% in Q2 2026, and first-half 2026 totals of 4.877tn won in revenue and 461.3bn won in operating profit were up 14.0% and 36.4% year on year respectively, with net profit up 15.7%, according to the company.

As drivers, management cited large-project revenue recognition, project cost improvement, a selective order strategy and execution differentiation based on AI, automation and modular technologies.

On the other side, Q1 2026 advanced-industry revenue fell 25.3% year on year to 574.2bn won with gross margin down 1.3 percentage points to 13.9%, while Pyeongtaek P3 and P5 balances of 12.7bn won and 28.5bn won showed those jobs entering their final stage, confirming that the profit recovery currently leans on hydrocarbon and new energy.

Industry analysis

The plant EPC cycle is currently being shaped by order flow and geopolitics at the same time.

In a May 2026 report, KB Securities analyst Jang Moon-jun said three forces were operating simultaneously - a restart of affiliate capex cycles, faster global plant awards on energy security, and Middle East demand tied to war-damage repair - and described this as a change in the market environment itself rather than a one-off.

On the Middle East, Hana Securities analyst Kim Seung-jun pointed to reconstruction demand centered on Qatar, Bahrain and Kuwait, and the Bapco refinery in Bahrain, which the company won in 2018 and completed, suffered a fire from an Iranian strike in March 2026.

LNG supply-demand is another swing factor: Kyobo Securities noted in June 2026 that 2025 was a record year for US liquefaction final investment decisions at roughly 50 MTPA, with pre-FID volumes accounting for 59% of the active pipeline.

Domestically, AI infrastructure investment has lifted construction demand tied to semiconductor clusters and data centers, and brokerages have begun discussing a structural improvement in the construction sector.

In cycle terms, company revenue has passed through a contraction phase since the 2023 peak, while orders have recovered to 3tn won in Q2 2026 with a 22.7tn won backlog, described as about 2.5 years of work.

Competitive positioning rests on large hydrocarbon execution capability and modular technology; analysts note the company is pushing modular application to 40-60% and has invested in a FEED-to-EPC structure plus AI and digital design automation, extending modularization to complex pre-assembled units to compress schedules.

On the other hand, the backlog's concentration in the Middle East and North Africa is flagged as a source of award volatility tied to geopolitics and oil prices.

Outlook

The company has set a 2026 new-order target of 12tn won, and Q1 awards of 4.6277tn won filled 39% of that goal while Q1 revenue and operating profit reached 23% and 24% of annual guidance.

Adding 3tn won of Q2 orders puts the first-half total in the 7tn won range, and management said the 22.7tn won backlog underpins confidence in meeting the annual target.

The waiting pipeline is sizable: 16 projects worth USD 26.8bn (about 38tn won), led by Saudi SAN-6, Qatar urea, Mexico's Pacifico Mexinol and UAE Falcon PLA, with petrochemicals at 45% and clean energy at 30% by product, and 51% structured as FEED-to-EPC conversions.

At the same time, observers note that the pipeline excludes new advanced-industry projects, leaving the revenue gap there as an unresolved task.

On the growth side, the company is performing FEED for Indonesia's INPEX Abadi LNG and pre-FEED on a North American LNG project, and a main contract win would mark its first LNG terminal-related award.

Among broker estimates, KB Securities projected in a May 2026 report revenue of 10.015tn won in 2026 and 11.266tn won in 2027, with operating profit of 866bn won in 2026 and 1,012bn won in 2027. Kyobo Securities in June 2026 estimated 2026 revenue of 10.151tn won and operating profit of 888bn won.

These estimates depend on when large pipeline items convert to contracts and how quickly affiliate awards resume, and results from Q3 2026 onward have not yet been confirmed through disclosure.

Valuation

PER

13.6×

PBR

1.8×

ROE

14.1%

EPS

₩3,383

BPS

₩25,571

Dividend per share

₩790

Looking at earnings and multiples together, the company has moved past the 2023-2025 contraction in revenue and profit into a stretch of renewed first-half 2026 profit growth.

On historical trading, Kiwoom Securities analyst Shin Dae-hyun noted that the stock traded up to a 15.8x forward price-earnings ratio and 2.5x price-book ratio in 2021-2022, when semiconductor investment expectations were high.

As for target multiples, Kyobo Securities analyst Lee Sang-ho said in June 2026 that his valuation used 2.07x, the upper end of the five-year average, while iM Securities analyst Bae Se-ho said in April 2026 that he had raised his target price-book multiple from 2.0x to 2.4x to reflect Middle East reconstruction demand and expected LNG orders.

In other words, the reference bands used in the market sit at a premium to net assets, and the current multiples are best read from the live figures on the data card.

On shareholder returns, under a three-year 15-20% return policy the 2025 dividend was raised roughly 20% from the prior year, and the payout ratio rose from 0% in 2023 to 17.1% in 2024 and about 25% in 2025.

The decisive variables for how those multiples are assessed are how far hydrocarbon and new energy offset the advanced-industry revenue gap, and whether the 12tn won order target is met.

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

Order recovery and a larger backlog

Q1 2026 new orders of 4.6277tn won were up 91.4% from 2.4174tn won a year earlier, led by 3.1736tn won in hydrocarbon plus 592.3bn won in new energy and 861.8bn won in advanced industry. Another 3tn won was booked in Q2, lifting the backlog to 22.7tn won, described as roughly 2.5 years of work.

Because orders convert to revenue with a lag, a larger backlog forms the base for future revenue recognition. The pace of that conversion, however, varies by contract timing and progress rates.

Three-unit reorganization and new-energy growth

The early-2026 shift to hydrocarbon, advanced industry and new energy explicitly enlarged the role of future-energy businesses.

Q1 2026 new-energy revenue rose 136.9% year on year to 563.3bn won as projects such as Malaysia's Phoenix biorefinery, UAE's TA'ZIZ methanol and the US Wabash hydrogen plant began contributing. KB Securities projected in May 2026 that new-energy revenue would reach 1.96tn won in 2026 and 2.545tn won in 2027. Segment diversification works to reduce dependence on any single end market.

Balance sheet and shareholder returns

The debt-to-equity ratio fell from 204.6% in 2022 to 125.8% in 2025, while total equity grew from 2.577tn won to 4.446tn won over the same period. Net cash stood at 3.5614tn won at the end of Q1 2026, up 24.0% from the prior year-end, with the debt ratio reflecting advance payments typical of EPC work.

The payout ratio rose from 0% in 2023 to 17.1% in 2024 and about 25% in 2025, above the stated three-year 15-20% return range. Cash capacity also underpins the guarantee and working-capital burden of executing large projects.

Bear factors

Advanced-industry revenue gap

As the Samsung Electronics revenue share fell from 27.7% in 2024 to 22.0% in 2025, advanced-industry revenue dropped from 4.5936tn won to 2.5312tn won. Advanced-industry revenue fell another 25.3% in Q1 2026, and the Pyeongtaek P3 and P5 balances entered their closing stage.

The company's pipeline contains no new advanced-industry projects, leaving that gap unaddressed. If affiliate semiconductor awards resume later than expected, the segment's revenue recovery would be pushed out as well.

Middle East concentration and geopolitics

With 56% of the backlog in the Middle East and North Africa, award volatility tied to geopolitics and oil prices is cited as a standing risk. The Bapco refinery in Bahrain, won in 2018 and completed by the company, caught fire after an Iranian strike in March 2026.

Reconstruction expectations have also swung with external factors such as stalled US-Iran ceasefire talks. If regional awards slip, the second-half progress toward the 12tn won order target could be affected.

History of missed order targets and cash-flow swings

Revenue fell from 10.625tn won in 2023 to 9.029tn won in 2025 and operating profit from 993.1bn won to 792.1bn won. Operating cash flow swung widely, from negative 459.8bn won in 2023 to 1,635.8bn won in 2024 and 254.4bn won in 2025.

The company secured about 40% of its 12tn won annual target in Q1 2026, but with record annual orders of 14.4tn won in 2024 and 13.1tn won in 2012, the target itself is demanding. If large awards slip across quarters, both the annual achievement rate and the subsequent revenue recognition schedule can be delayed.

Risk factors

Project execution and cost risk

Large overseas EPC work carries meaningful cost-overrun exposure under lump-sum structures, and Kyobo Securities said in June 2026 that it believed the company chose a structure sharing volatile field construction with local contractors for its US LNG entry, expecting this to avoid lump-sum cost-overrun risk.

Conversely, expansion into new products and regions can carry learning costs. KB Securities also noted in a June 2026 report that investors worry expansion into new markets and products may involve trial and error. Cost issues feed directly into a given quarter's margin.

Customer concentration and affiliate capex dependence

In 2025 Saudi Aramco accounted for 31.43% and Samsung Electronics 22.04% of revenue, so the top two customers exceeded half the total. Aramco revenue expanded roughly threefold from 10.9% in 2024 to 31.4% in 2025, meaning results are heavily linked to specific project progress.

Fadhili gas is scheduled for completion in September 2027, so a delay in landing follow-on mega-projects could create a revenue recognition gap. Changes to affiliate capex plans also feed straight into the advanced-industry segment.

Subsidiary, affiliate and guarantee exposure

Non-controlling interests on a consolidated basis have stayed negative - minus 116.1bn won in 2022, minus 174.9bn won in 2023, minus 336.0bn won in 2024 and minus 294.5bn won in 2025.

This points to accumulated losses at some subsidiaries remaining inside the consolidated statements, and the details should be checked in the notes to the annual report.

Overseas EPC work can also create project-related payment and financial guarantee exposure, so disclosed guarantee limits and outstanding balances warrant review alongside earnings. Such items may not show up immediately in profit and loss yet can convert into cash burdens if problems arise.

What to watch next

Late October 2026
Q3 2026 preliminary results (Q1 was released on April 23 and Q2 on July 23). Key items are revenue and operating margin, how far cumulative new orders have progressed against the 12tn won annual guidance, and whether the advanced-industry revenue decline has eased.
Q4 2026
Whether large pipeline items such as Saudi SAN-6, Qatar urea, Mexico's Pacifico Mexinol and UAE Falcon PLA are awarded. These appear as single sales and supply contract disclosures, and contract value and duration will shape the 2027 revenue recognition schedule.
Q4 2026 to H1 2027
Whether affiliate semiconductor line orders resume. Analysts note that Samsung Electronics restarted P4 construction in the second half of 2025 and resumed P5 investment from late 2025, adopting a shell-first approach of building cleanrooms before installing equipment, so new advanced-industry order disclosures would be direct evidence of the revenue gap being filled.
Late January 2027
Q4 and full-year 2026 confirmed results, 2027 guidance for revenue, operating profit and orders, and the year-end dividend decision. Watch whether the three-year 15-20% shareholder return framework is maintained and how the return size is set against 2026 earnings.
March 2027
The 2026 annual business report. It provides segment revenue and gross margins, the regional and product mix of the backlog, related-party transactions, notes on subsidiaries and affiliates, and guarantee limits and balances in one place.

Overall view

Samsung E&A's past four years combine expansion, adjustment and a renewed recovery.

Revenue fell from 10.625tn won in 2023 to 9.029tn won in 2025 and operating profit from 993.1bn won to 792.1bn won, yet the operating margin held at 8.8%, above the 7.0% of 2022, and Q2 2026 revenue of 2.609tn won with operating profit of 273.1bn won lifted the quarterly margin to 10.5%.

On orders, recovery signals include Q1 new awards of 4.6277tn won, up 91.4% year on year and 3tn won in Q2 with a 22.7tn won backlog.

On the other side sit the advanced-industry gap, where revenue shrank from 4.5936tn won in 2024 to 2.5312tn won in 2025, a backlog 56% concentrated in the Middle East and North Africa, and a revenue base where two customers account for more than half.

Financially, the debt-to-equity ratio declined from 204.6% in 2022 to 125.8% in 2025 and the payout ratio rose to about 25%, though operating cash flow has swung widely by year, making single-year figures a weak basis for judging the trend.

What matters next is second-half progress toward the 12tn won order target, conversion of the large pipeline into contracts, and the timing of resumed affiliate awards; results from Q3 2026 onward are not yet confirmed through disclosure. This report is for information purposes and contains no buy or sell opinion and no target price.

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.