What Happened? Supreme Court Confirms ‘Not Guilty’ Verdict for Former Samsung C&T Executives
On July 17, 2025, Samsung C&T made a significant announcement: the Supreme Court upheld the acquittal of former presidents Chi-hun Choi, Young-ho Lee, and Shin Kim on charges of professional breach of trust. This officially concludes the legal battle that began with their indictment in September 2020.
Why Does It Matter? The Significance of Resolving ‘Legal Risk’
This ruling is expected to have several positive effects for Samsung C&T.
- ✅ Uncertainty Removed: The biggest gain is the end of a prolonged legal dispute. This removes a major factor of uncertainty that has suppressed investor sentiment.
- ✅ Improved Corporate Image: Shedding the negative label of ‘breach of trust’ can help restore the company’s tarnished image and rebuild credibility.
- ✅ Management Stability: The verdict frees up management to focus more on core business activities without the burden of litigation.
A key caveat, however, is that this positive news may have already been largely priced into the stock. Therefore, instead of expecting further gains from the verdict alone, it’s crucial to examine the company’s underlying health—its fundamentals.
So, What’s the Real Outlook? A Check on Fundamentals and Risk Factors
With the legal issue resolved, Samsung C&T’s stock performance will now depend entirely on its fundamentals and the external environment. Let’s look at the Q1 2025 results and key risk factors.
1. Q1 2025 Earnings: A Story of Light and Shadow
In Q1 2025, Samsung C&T reported KRW 9.74 trillion in revenue and KRW 724.4 billion in operating profit. While revenue decreased year-over-year, operating profit actually increased, indicating a ‘recession-type surplus.’ This was due to starkly different performances across its business divisions.
2. State of the Divisions: Bio Leads While Others Endure
- 👍 Bio (The Growth Engine): The bio division, led by subsidiary Samsung Biologics, was the star performer. Strong growth in its CDMO business and robust sales of biosimilars drove a significant increase in operating profit, propping up the entire company’s results. Expansion into the U.S. market adds to long-term growth expectations.
- 😐 Construction (Mixed Outlook): An increase in overseas orders, particularly from the Middle East, is positive. However, this is offset by a slowdown in the domestic housing market and the burden of rising raw material costs.
- 👎 Trading/Fashion/Resort (Struggling): These divisions showed sluggish performance due to the global economic slowdown, weak consumer sentiment, and intensified competition.
3. Macroeconomic Risks That Can’t Be Ignored
The current market is grappling with a trifecta of high interest rates, high inflation, and a global economic slowdown. These factors directly impact Samsung C&T.
- Commodity Prices & FX Rates: Volatility in these areas can directly hit the profitability of the Construction and Trading divisions.
- Weak Consumer Sentiment: A prolonged economic downturn could delay the recovery of the Fashion and Resort divisions.
- Geopolitical Risks: Instability in regions like the Middle East could pose a potential threat to overseas construction projects.
Investor Action Plan: Short-Term Volatility vs. Long-Term Growth
In conclusion, the Supreme Court’s acquittal is a clear positive that removes a major cloud of uncertainty over Samsung C&T. However, it does not automatically guarantee a rosy future for the stock price.
From a short-term perspective, investors should closely watch for performance fluctuations driven by macroeconomic variables like the economic slowdown, raw material prices, and exchange rates. The recovery of the Trading, Fashion, and Resort divisions will be particularly important.
From a long-term perspective, the focus should be on Samsung C&T’s core growth drivers. The key question is whether the strong growth of the Bio division and the expansion of overseas orders in the Construction division can offset the underperformance of other segments and drive the company’s long-term value. With legal risks now in the rearview mirror, it is the perfect time to coolly assess the intrinsic competitiveness of each business unit and formulate a sound investment strategy.