DOCSLIB.ORG

Samsung Heavy Industries (010140)

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Samsung Heavy Industries (010140) Samsung Heavy Industries (010140) 2021 Guidance for Merchant Vessels Already Met Dongik Jeong Shipbuilding / Holding Companies April 1, 2021 +82-2-6114-2965 [email protected] Maintain HOLD and raise target price We revise up our 12m TP to KRW6,500 (12m fwd BVPS x 1.06x target P/B) for SHI to reflect to KRW6,500 changes in: (1) sustainable ROE, (2) the 12m fwd base period, (3) total shareholders’ equity resulting from revised earnings forecasts and (4) terminal growth rate as well as risk-free rate resulting from change in market rate assumptions. The last closing price (Apr 1) sits above our new TP, thus we maintain HOLD. Bull-case scenario applied to reflect As our bull-case scenario—international oil prices surpass USD60.00/bbl, which is based on rise in international oil price and solid WTI crude oil, and new order wins exceed USD7.0bn—is currently playing out, we apply a 20% new order wins premium to sustainable ROE. WTI crude recently climbed to the USD60.00 level/bbl while 2021’s new order wins look highly likely to exceed USD7.0bn amid an already solid order influx. 1Q21 new order wins at USD4.9bn; In 1Q21, SHI won 39 orders for merchant vessels totaling USD4.9bn (34 containerships, four 2021 annual guidance for merchant VLCCs, one LNG carrier) but no orders for offshore plants. The company’s 2021 new order vessels already met guidance is USD4.6bn for merchant vessels and USD3.2bn for offshore plants, thus guidance for merchant vessels has already been met. This can be attributable to a combination of factors, including high expectations of post-vaccination economic recovery, bullish freight rates and concerns over potential growth in newbuilding price. 1Q21 preview: Earnings to miss For 1Q21, we estimate K-IFRS consolidated revenue to reach KRW1.74tn (-4.7% YoY) market consensus and the operating loss to widen YoY to KRW70.3bn (-4.0% OPM). Hold Maintain Trading Data Risk & Total Return (annualized over three years) Free float 70.5% Target Price (Raised) KRW6,500 Avg. T/O val. (3m, KRWbn) 63.8 Return 1 2 3 4 High5 Risk Dividend yield* 0.0% Foreign ownership 16.3% 1 FALSE FALSE FALSE FALSE FALSE Major shareholders Samsung Electronics and Total return -13.6% 2 FALSE TRUE FALSE FALSE FALSE Current price (Apr 1) KRW7,520 9 others 21.9% 3 FALSE FALSE FALSE FALSE FALSE Consensus target price KRW6,591 National Pension Service 7.1% 4High FALSE FALSE FALSE FALSE FALSE Market capitalization USD4.7bn Stock Price Performance 5 FALSE FALSE FALSE FALSE FALSE * 12-month forward (%) 1M 3M 6M 12M Absolute 14.6 6.8 41.1 96.3 Relative 11.9 -0.6 6.4 7.2 Stock Price & Relative Performance Earnings Forecast & Valuation Fiscal year-end 2020A 2021E 2022E 2023E Relative performance (LHS) Stock price (RHS) Revenue (KRWbn) 6,860 7,107 7,755 8,560 % KRW OP (KRWbn) -1,054 -124 105 235 50 9,000 NP to control. int. (KRWbn) -1,482 -268 -34 57 40 7,800 EPS (KRW) -2,353 -425 -54 90 30 EPS growth (%) RR RR RR TTB 20 6,600 P/E (x) N/A N/A N/A 83.7 10 5,400 EV/EBITDA (x) N/A 55.4 22.6 17.0 0 4,200 P/B (x) 1.2 1.2 1.2 1.2 -10 ROE (%) -33.1 -7.1 -0.9 1.4 -20 3,000 Div. yield (%) N/A 0.0 0.0 0.0 Apr '20 Jul '20 Oct '20 Jan '21 Apr '21 Source(s): Company data, KB Securities Revenue should meet the market consensus but OP should fall short because of larger-than-expected provisions for construction losses coming from huge order wins in 1Q21; the provisions amount to 3% of non-gas line orders received in January as well as 1% of non-gas line orders received between February and March. Ongoing upward pressure on commodity prices (incl. steel plate) could create a need for additional provisioning, but given that price negotiations are underway, we did not reflect this in our earnings forecast. 2 Investment Opinion & Risks Base-case scenario: Catalysts 1) Order intake at USD8.0-10.0bn 2) WTI price at USD50.00-70.00 Bull-case scenario KRW8,100 (1.32x target P/B) Bull-case scenario: Upside risks Current price KRW7,520 (Apr 1) 1) Order intake above USD10.0bn 2) WTI price above USD70.00; Base-case scenario (target price) KRW6,500 (1.06x target P/B) offshore order intake above USD3.0bn Bear-case scenario: Downside risks Bear-case scenario KRW4,800 (0.79x target P/B) 1) Order intake below USD8.0bn 2) WTI price below USD50.00; offshore order intake below USD1.0bn Revised Earnings Estimates Valuation & Target Price Calculation (KRWbn, %) Previous Revised Change 2021E 2022E 2021E 2022E 2021E 2022E 1) Valuation method: Revenue 6,681 7,059 7,107 7,755 6.4 9.9 P/B-ROE model OP -119 103 -124 105 Loss 1.8 widens 2) Target price calculation: KRW6,105 12m fwd BVPS x 1.06x multiple NP (to control. int.) -249 -30 -268 -34 Loss Loss widens widens 3) Target price range: Source(s): KB Securities estimates KRW4,800 - KRW8,100 KB Estimates vs. Consensus 4) Valuation at target price: (KRWbn, %) KB Estimates Consensus Difference 1.08x 2021E P/B 2021E 2022E 2021E 2022E 2021E 2022E Revenue 7,107 7,755 6,999 7,388 1.5 5.0 OP -124 105 -72 36 Loss 188.5 widens NP (to control. int.) -268 -34 -156 -48 Loss Loss widens narrows Source(s): FnGuide consensus (3m), KB Securities estimates Revenue Composition (2021E) Earnings Sensitivity Analysis (%) EPS change 0.2% 2021E 2022E Loss Loss 23.8% +1% in FX rate narrows narrows Shipbuilding Loss Loss Offshore +1pp in interest rate Construction & Other widens widens 76.0% Source(s): KB Securities estimates Peer Group Comparison (KRWbn x, %) Market P/E P/B EV/EBITDA ROE Dividend Yield Cap 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E Samsung Heavy Industries 4,738 N/A N/A 1.0 1.0 37.0 26.0 -4.0 -1.2 0.0 0.0 KSOE 9,094 91.4 45.2 0.8 0.8 19.8 16.2 0.9 1.9 0.0 0.0 DSME 2,940 17.9 9.4 0.7 0.7 7.3 5.0 4.2 7.4 0.0 0.0 Keppel 8,210 13.8 11.4 0.9 0.8 17.1 14.9 6.3 7.3 3.1 3.9 Source(s): FnGuide, Bloomberg consensus, KB Securities 3 Table 1. Target Price Calculation Fair value Line Items Bull Base Bear Notes Case Case Case Cost of equity (A= a+(b x c)) 8.92 Risk-free rate (a) 0.69 Avg. 1y monetary stabilization yield (last three months) Market risk premium (b) 7.37 Required rate of return - risk-free rate Beta (c) 1.12 52w adj. beta 20% premium to upcycle average; bull case/bear case ROEs +20%/-20% Sustainable ROE (B) 11.18 9.32 7.45 compared to base case ROE Min. (50% long-term retention rate x ROE, avg. 30y KTB yield for last three Terminal growth rate (C) 1.98 months) Target P/B (D= (B-C) / (A-C)) 1.32 1.06 0.79 Fair equity value (E=D X d) 5,097 4,065 3,033 12m fwd total equity (d) 3,847 No. of shares (e) 63,011 Fair price per share (F=E/e) 8,089 6,451 4,813 12m target price (G≒F) 8,100 6,500 4,800 Current price (H) 7,520 Apr 1, 2021 Upside (I= G/H) 7.3 -13.6 -36.4 Rating HOLD Source(s): Company data, KB Securities estimates Note: MRP of 7.37% = WMI500 total return of 10.97% – 1y MSB total return of 3.61% Table 2. Quarterly Earnings (K-IFRS consolidated) 1Q21E Change Diff. (KRWbn, %) 1Q20 2Q20 3Q20 4Q20 KB Estimate Consensus YoY QoQ Consensus Revenue 1,826.6 1,691.5 1,676.8 1,665.3 1,741.2 1,729.9 -4.7 4.6 0.7 OP -47.8 -707.7 -13.4 -285.1 -70.3 -31.7 Loss widens Loss narrows Loss widens EBT -220.1 -699.7 -11.1 -547.0 -109.7 -54.6 Loss narrows Loss narrows Loss widens NP (to control. int.) -224.8 -701.0 -5.5 -559.0 -134.5 -55.1 Loss narrows Loss narrows Loss widens OPM -2.6 -41.8 -0.8 -17.1 -4.0 -1.8 EBT margin -12.0 -41.4 -0.7 -32.8 -6.3 -3.2 NPM (to control. int.) -12.3 -41.4 -0.3 -33.6 -7.7 -3.2 Source(s): Company data, FnGuide consensus (3m), KB Securities estimates Fig 1. Shipbuilding/Offshore New Orders Fig 2. Monthly New Order Intake (USDbn) (USDbn) 2021 guidance 25 8.0 2021 order wins (USD7.8bn) 21.2 x 10x 2021 guidance 20 2020 order wins 6.0 15.3 14.9 4.9 2020 order wins 15 13.3 (USD5.5bn) 4.0 9.7 9.6 10.0 10 8.2 7.8 8.4 7.8 7.3 6.9 2.0 5 1.4 6.3 7.1 0.5 5.5 4.9 0 0.0 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source(s): Company data, KB Securities estimates Source(s): Company data, KB Securities Note: Dotted line represents order guidance for corresponding year 4 Income Statement Statement of Financial Position (KRWbn) 2019A 2020A 2021E 2022E 2023E (KRWbn) 2019A 2020A 2021E 2022E 2023E (Reporting standard) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (Reporting standard) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) (IFRS-C) Revenue 7,350 6,860 7,107 7,755 8,560 Total assets 13,600 12,922 13,651 13,842 13,980 Cost of revenue 7,288 7,326 6,662 7,069 7,726 Current assets 6,929 6,698 7,562 7,899 8,167 Gross profit 61 -466 445 686 834 Cash and cash equivalents 384 987 945 888 887 SG&A expenses 678 589 569 582 599 Current financial assets 546 597 600 600 600 Operating profit -617 -1,054 -124 105 235 Trade receivables 201 259 284 310 342 EBITDA -300 -772 150 369 490 Inventory 2,340 1,821 1,947 2,068 2,195 Non-operating accounts -523 -421 -160 -150 -160 Other current assets 3,459 3,034 3,786 4,033 4,143 Interest income 26 10 13 13 13 Non-current assets 6,671 6,224 6,089 5,944 5,813 Interest expenses 123 165 170 170 170 Investment assets 54 62 63 64 65 Profit on equity method 0 -3 -3 -3 -3 Property, plant and equipment 5,727 5,505 5,342 5,188 5,051 Net other non-operating income -425 -264 0 10 0 Intangible assets 46 28 33 37 40 Profit before tax -1,139 -1,475 -284 -45 75 Other non-current assets 843 629 651 654 658 Income tax expense 176 18 -78 -12 21 Total liabilities 8,351 9,204 9,789 9,858 9,941 Net profit -1,315 -1,493 -206 -33 55 Current liabilities 7,089 7,534 7,959 8,027 8,109 NP attributable to controlling interests -1,311 -1,482 -268 -34 57 Trade payables 651 418 526 574 634 Adj.
Load more

Recommended publications
  • FTSE Korea 30/18 Capped
    2 FTSE Russell Publications 19 August 2021 FTSE Korea 30/18 Capped Indicative Index Weight Data as at Closing on 30 June 2021 Index weight Index weight Index weight Constituent Country Constituent Country Constituent Country (%) (%) (%) Alteogen 0.19 KOREA Hyundai Engineering & Construction 0.35 KOREA NH Investment & Securities 0.14 KOREA AmoreG 0.15 KOREA Hyundai Glovis 0.32 KOREA NHN 0.07 KOREA Amorepacific Corp 0.65 KOREA Hyundai Heavy Industries 0.29 KOREA Nong Shim 0.08 KOREA Amorepacific Pfd. 0.08 KOREA Hyundai Marine & Fire Insurance 0.13 KOREA OCI 0.17 KOREA BGF Retail 0.09 KOREA Hyundai Merchant Marine 1.02 KOREA Orion 0.21 KOREA BNK Financial Group 0.18 KOREA Hyundai Mipo Dockyard 0.15 KOREA Ottogi 0.06 KOREA Celltrion Healthcare 0.68 KOREA Hyundai Mobis 1.53 KOREA Paradise 0.07 KOREA Celltrion Inc 2.29 KOREA Hyundai Motor 2.74 KOREA Posco 1.85 KOREA Celltrion Pharm 0.24 KOREA Hyundai Motor 2nd Pfd. 0.33 KOREA Posco Chemical 0.32 KOREA Cheil Worldwide 0.14 KOREA Hyundai Motor Pfd. 0.21 KOREA Posco International 0.09 KOREA CJ Cheiljedang 0.3 KOREA Hyundai Steel 0.33 KOREA S1 Corporation 0.13 KOREA CJ CheilJedang Pfd. 0.02 KOREA Hyundai Wia 0.13 KOREA Samsung Biologics 0.92 KOREA CJ Corp 0.11 KOREA Industrial Bank of Korea 0.22 KOREA Samsung C&T 0.94 KOREA CJ ENM 0.15 KOREA Kakao 3.65 KOREA Samsung Card 0.08 KOREA CJ Logistics 0.12 KOREA Kangwon Land 0.23 KOREA Samsung Electro-Mechanics 0.81 KOREA Coway 0.36 KOREA KB Financial Group 1.78 KOREA Samsung Electronics 25.36 KOREA Daewoo Engineering & Construction 0.12 KOREA KCC Corp 0.12 KOREA Samsung Electronics Pfd.
    [Show full text]
  • Korean Multinationals Show Solid Recovery After Global Crisis
    Korean multinationals show solid recovery after global crisis Report dated November 16, 2010 EMBARGO: The contents of this report must not be quoted or summarized in the print, broadcast or electronic media before November 16, 2010, 10:00 a.m. Seoul; 1 a.m. GMT, and 9:00 p.m. November 15, 2010, New York. Seoul and New York, November 16, 2010 The Institute of International Affairs of the Graduate School of International Studies (GSIS) at Seoul National University in Seoul, and the Vale Columbia Center on Sustainable International Investment (VCC) at Columbia University in New York, are releasing the first annual report on leading Korean multinationals. The research for this report was conducted in 2010 and covers the period 2007 to 2009. 1 Highlights The Republic of Korea (henceforth ‘Korea’), the 11 th largest economy in the world, has now become one of the leading investors abroad. The number and the size of the corporate giants that dominate the economy have increased over the years, boosting and diversifying their investments around the world. Korea’s multinational enterprises ranked by their foreign assets (see table 1 below) show about USD 93 billion in assets held abroad. 2 Samsung Electronics Co., Ltd. (SEC), a member of a leading Korean conglomerate, ranked 1 st with slightly over USD 18 billion, followed by another top conglomerate member, LG Electronics, with over USD 10 billion dollars. Hyundai Heavy Industries Co., Ltd, and DSME Co., Ltd, had foreign assets of over USD 8 billion each and LG Display had over USD 6 billion. The top five firms together accounted for just over half of the total foreign assets of the top 20 companies.
    [Show full text]
  • Samsung Heavy Industries
    SHI SUSTAINABILITY REPORT 2015 SAMSUNG HEAVY INDUSTRIES OVERVIEW Message from the CEO Company Profile Management Philosophy Business Introduction Business Operation Process Governance Stakeholder Communication Aspect Boundary Materiality Test 1 Overview Message from the CEO Samsung Heavy Industries, which has shown continuous growth and remarkable development through turning countless adversities into valuable opportunities, now prepares for an even bigger leap forward on the basis of its decisive innovations. Dear Stakeholders, who trust and value Samsung Heavy Industries, Samsung Heavy Industries (hereinafter referred to as SHI), which has successfully executed various projects in shipbuilding and offshore fields since its foundation in 1974, consistently endeavors to reflect the voices of its stakeholders, including clients, subcontractors, employees, and local communities. Moreover, as a global industry leader, SHI is investing much effort in building reliable and eco-friendly ships and offshore production facilities. 2015 has been by far the most difficult business year for SHI due to significant challenges, such as the global economic recession, low oil prices, and a series of trials & errors in executing offshore projects. Despite such difficult conditions, however, SHI employees endeavored to maintain safety and quality as well as comply with delivery schedule by showing concerted commitment and dedication, thereby transforming the crisis into opportunities. th Not only has SHI promoted the importance of safety awareness by announcing January 19 as the official Safety Awareness Day, but it has also received the highest level of recognition in the Safety Assessment Evaluation, conducted by ExxonMobil, for 6 consecutive years. Moreover, SHI significantly improved quality by enforcing its 10 Quality Rule Implementation Check on a weekly basis for flawless delivery.
    [Show full text]
  • Samsung Electronics Co., Ltd. and Its Subsidiaries NOTES to INTERIM
    Samsung Electronics Co., Ltd. and its Subsidiaries NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1. General Information 1.1 Company Overview Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares on the Korea Stock Exchange in 1975. SEC and its subsidiaries (collectively referred to as the “Company”) operate four business divisions: Consumer Electronics (“CE”), Information technology & Mobile communications (“IM”), Device Solutions (“DS”) and Harman. The CE division includes digital TVs, monitors, air conditioners and refrigerators and the IM division includes mobile phones, communication systems, and computers. The DS division includes products such as Memory, Foundry and System LSI in the semiconductor business (“Semiconductor”), and LCD and OLED panels in the display business (“DP”). The Harman division includes connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company is domiciled in the Republic of Korea and the address of its registered office is Suwon, the Republic of Korea. These interim consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling company, consolidates its 256 subsidiaries including Samsung Display and Samsung Electronics America. The Company also applies the equity method of accounting for its 41 associates, including Samsung Electro-Mechanics.
    [Show full text]
  • Tax Alert | Delivering Clarity 3 August 2020
    Tax Alert | Delivering clarity 3 August 2020 Activities carried out by project office does not constitute a permanent establishment The Apex Court rendered its decision that, based on activities carried out, the project office does not constitute a fixed place permanent establishment of the taxpayer in India, as per Article 5 of India-Korea tax treaty Facts of the case: Oil and Natural Gas Corporation (ONGC) awarded a turnkey contract (on 28 February 2006) to a consortium of Samsung Heavy Industries Co. Ltd. (taxpayer)1, a company incorporated in South Korea, and an Indian Company. The turnkey contract was for carrying out the work, amongst others, of surveys, design, engineering, procurement, fabrication, installation and modification at existing facilities, and start-up and commissioning of entire facilities covered under the ‘Vasai East Development Project’ (Project). The taxpayer set up a Project Office (PO) in Mumbai to act as “a communication channel” between the taxpayer and ONGC in respect of the Project. Pre-engineering, survey, engineering, procurement and fabrication activities took place outside India in 2006 and were brought outside Mumbai in 2007 to be installed at the Project site. The taxpayer for the Financial Year (FY) 2006-07, corresponding to Assessment Year (AY) 2007-08, had incurred a loss in respect of the activities carried out in India and thus, declared ‘Nil’ profit. The taxpayer’s return was selected for audit and the Assessing Officer (AO) in the draft order, based on terms of the agreement, held that: ─ The Project was a single indivisible “turnkey” project, whereby ONGC was to take over the project completed only in India; ─ Resultantly, the profits arising from the successful commissioning of the Project would also arise only in India; ─ The work relating to fabrication and procurement of material was part of the contract for execution of work assigned by ONGC.
    [Show full text]
  • 1H13 Business Report
    1H13 Business Report I. Corporate Overview □ Affiliates As of end-1H 2013, Samsung Group had a total of 77 domestic affiliates. Compared to end-2012, two new affiliates (Jung-ahm Wind Power, and Sungkyunkwan University Dormitory) were added and six (SECRON, SEHF Korea, SB LiMotive, GES, Idea Company Prog, Top Cloud Corporation) were excluded. Among Samsung Group’s 77 affiliates, 17 including Samsung Electronics are listed, and 60 are unlisted. (As of June 30, 2013) No. of affiliates Name of affiliates Samsung C&T, Cheil Industries, Samsung Electronics, Samsung SDI, Samsung Techwin, Samsung Life Insurance, SEMCO, Samsung Heavy Industries, Listed 17 Samsung Card, Hotel Shilla, Samsung Fire & Marine Insurance, Samsung Securities, S1, Samsung Fine Chemicals, Samsung Engineering, Cheil Worldwide, Credu, Samsung Everland, Samsung Petrochemical, Samsung SDS, Samsung General Chemicals, Samsung Total Petrochemicals, Samsung Lions, SERI, STECO, Samsung Thales, SEMES, Living Plaza, Samsung Corning Precision Materials, Samsung SNS, Samsung Electronics Service, Samsung Electronics Logitech, Hantok Chemicals, Global Tech, CVnet Corporation, Care Camp, Allat Corp., SECUI.com, Wealthia.com, Open Tide Korea, Samsung Futures, 365Homecare, Samsung Venture Investment Corporation, Samsung Asset Management, Saengbo, Samsung Claim Unlisted 60 Adjustment Service, Anycar Service, World Cyber Games, SD Flex, Gemi Plus Distribution, Samsung Bluewings, HTSS, RAY, Songdo Land Mark City, S- Core, S1 CRM, Open Hands, S-EnPol, Samsung Medison, Samsung Biologics, Miracom Inc., Samsung Life Service, SMP, STM, SSLM, SU Materials, Colombo Korea, Samsung Display, Samsung Bioepis, Nuri Solution, Samsung Corning Advanced Glass , Natural 9, Daejung Offshore Wind Power, SERICEO, Samsung Real Estate, Jung-ahm Wind Power, Sungkyunkwan University Dormitory Total 77 ☞ Refer to 『□ Affiliates』 in 『III.
    [Show full text]
  • Korea Chaebols
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by K-Developedia(KDI School) Repository Emerging Market Spotlight November 2010 The Chaebols in South Korea: Spearheading Economic Growth South Korea has witnessed an incredible transformation in the Fast Facts three decades spanning from the Chaebols are large multinational family-controlled 1960s to 1990s, evolving from an conglomerates in South Korea, which have enjoyed strong impoverished country to a governmental support. developed high-income economy today. Often referred to as the The word Chaebol literally means “business association”. “Miracle of the Han River”, this President Park Chung Hee (1961-1979) widely propagated remarkable turnaround was and publicized the chaebol model of state-corporate achieved through an aggressive, alliance. outward-oriented strategy, focusing on developing large-scale The Chaebols have invested heavily in the export-oriented industrial conglomerates or manufacturing sector. chaebols. Some well-recognized South Korean conglomerates boasting global brand names are Samsung, Hyundai and Today, the chaebols have become LG. multinational powerhouses with a global footprint. And with this, The chaebol model of state-corporate alliance is based on South Korea boasts of an economy the Japanese Zaibatsu system, which encouraged economic that ranks 15th globally in nominal development through large business conglomerates from 1968 until the end of the World War II. terms and 13th in terms of Purchasing Power Parity (PPP). Paradigm shift in the South Korean economy The first half of the 20th century was a tumultuous, war-ravaged period for the country, punctuated by a 35-year Japanese colonization of the country, which ended with Japan’s defeat in World War II.
    [Show full text]
  • Samsung Press Information
    Company Overview History of Samsung Samsung's history dates to 1938 when "Samsung General Stores" opened in North Kyung- sang Province, Korea. The company conducted its trade business until the 1950s when it became a producer of basic commodities such as sugar and wool. In 1958, Samsung be- came involved in the insurance industry by incorporating a local fire & marine insurance company. During the 1960s, Samsung became one of the first Korean companies to actively expand its overseas trade. The group consolidated its manufacturing base by adding paper and fer- tilizer businesses. Samsung continued with expansion into the life insurance business, strengthened its retail operations and then moved into the communications sector, success- fully establishing a newspaper and a broadcasting company. The 1970s were a crucial period in shaping present-day Samsung. Its strengths in the semi- conductor, information and telecommunications industries grew from the significant in- vestments made during this period. Samsung also took a meaningful step toward heavy industries by venturing into aircraft manufacturing, shipbuilding and construction, as well as chemical industries. In the 1980s, Samsung expanded its efforts into exploring the larger markets overseas. The group began contributing to foreign economies by building facilities in the US, the UK and Portugal. Samsung also invested considerable resources into fostering Korea's rich heritage by supporting a wide range of cultural and artistic activities. The final decade of the 20th century saw the evolution of Samsung's new approach to management. Chairman Kun-Hee Lee's insightful vision and the introduction of the "New Management" in 1993 acknowledged the need to transform management philosophy in or- der to keep up with a rapidly changing global economy.
    [Show full text]
  • Samsung Heavy Industries Co., Ltd. and Subsidiaries Consolidated Financial Statements December 31, 2017 and 2016
    Samsung Heavy Industries Co., Ltd. and Subsidiaries Consolidated Financial Statements December 31, 2017 and 2016 Samsung Heavy Industries Co., Ltd. and Subsidiaries Index December 31, 2017 and 2016 Page(s) Independent Auditor’s Report ....................................................................................................................... 1-6 Consolidated Financial Statements Consolidated Statements of Financial Position ................................................................................................ 7-8 Consolidated Statements of Profit or Loss ........................................................................................................... 9 Consolidated Statements of Comprehensive Income ........................................................................................ 10 Consolidated Statements of Changes in Equity ................................................................................................. 11 Consolidated Statements of Cash Flows ............................................................................................................ 12 Notes to the Consolidated Financial Statements ................................................................................... 13-72 Independent Auditor’s Report (English Translation of a Report Originally Issued in Korean) To the Board of Directors and Shareholders of Samsung Heavy Industries Co., Ltd. We have audited the accompanying consolidated financial statements of Samsung Heavy Industries Co., Ltd. and its subsidiaries
    [Show full text]
  • One Laptop & One Big Hope
    OneGrowth Laptop and Technological & One big hope Development of the Korean Shipbuilding Industry Juan Carlos Capuñay Executive Director, APEC Sungsoo Song* 1. INTRODUCTION The shipbuilding industry is considered the representative success case in the history of the Korean industry. The country's shipbuilding tonnage was only 15,000 GT in 1972, but grew to 1.4 million GT in 1982 and surpassed 10 million GT in 2000. Based on ship orders, the country's shipbuild- ing industry ranked first in the world from 1999 to 2008 (excluding 2001). Korea surpassed Japan, which had long led the global shipbuilding industry, and emerged as a new shipbuilding power. However, it is also undeniably true that China, which has fostered its shipbuilding industry by es- tablishing a large shipbuilding complex at the national level, is rapidly catching up with Korea and threatens the country's status as the world’s leading shipbuilder. TABLE 1 Global Market Share of Major Shipbuilding Countries Unit: 1,000 CGT, % Classification 1997 1999 2001 2003 2005 2007 Size of global market 36,480 28,940 36,667 74,041 161,331 167,522 Korea(share) 6,764(29.2) 6,325(33.3) 6,990(29.6) 18,810(42.9) 13,571(32.4) 32,861(37.7) Japan(share) 8,790(37.9) 4,934(26.0) 7,932(33.5) 12,335(28.1) 9,446(22.6) 10,017(11.5) China(share) 1,211(5.2) 1,924(10.1) 2,802(11.8) 6,107(13.9) 6,606(15.8) 31,382(36.0) Note: These statistics include only ships of over 100 GT and are based on commissioned orders.
    [Show full text]
  • SAMSUNG ELECTRONICS Co., Ltd. Interim Business Report for the Quarter Ended March 31, 2015
    SAMSUNG ELECTRONICS Co., Ltd. Interim Business Report For the quarter ended March 31, 2015 Note about forward-looking statements Certain statements in the document, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our financial reports available on our website. See, also, 『Note on Forward-Looking Statements』 in preamble of 『II. Business Overview』. Samsung Electronics Interim Business Report 1 / 170 WorldReginfo - 35d6727f-d380-43ba-b636-eb9cfe08293a Table of Contents Certification ................................................................................................................................................................................ 3 I. Corporate Overview ............................................................................................................................................................... 4 II. Businesses Overview ........................................................................................................................................................
    [Show full text]
  • Will the Chaebol Reform Process Move Forward Under the Moon Jae-In Administration? —Future Directions and Challenges—
    Will the Chaebol Reform Process Move Forward under the Moon Jae-in Administration? —Future Directions and Challenges— By Hidehiko Mukoyama Senior Economist Economics Department Japan Research Institute Summary 1. Collusive links between politics and business were a major focus during South Korea’s 2017 presidential election. In an address to the national after his election victory, President Moon Jae-in promised to carry out reforms targeting the chaebol (industrial conglomerates) and eliminate collusion between politicians and business people. The purpose of this article is to clarify how the chaebol reform process is likely to proceed, what the focal points will be, and the issues that could arise. 2. The economic policy of the Moon Jae-in administration is based on the four pillars of income-driven growth, the establishment of an economy that will generate jobs, fair competition (including chaebol reform), and growth through innovation. Immediately after taking power, President Moon Jae-in announced policies targeted toward income-driven growth. Efforts to achieve growth through innovation began in the fall of 2017. The chaebol reform process has not yet begun. 3. Chaebol reform is necessary for several reasons. First, the concentration of economic power in the hands of the chaebol is producing harmful effects, including growing economic disparity, and a lack of jobs for young workers. Second, there have been numerous fraud cases relating to the inheritance of management rights by members of the chaebol families. Third, the chaebol have repeatedly colluded with politicians. 4. One reason for repeated cases of business-political collusion is the enormous amount of au- thority wielded by the South Korean president.
    [Show full text]