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Samsung Heavy Rallies After Profit Gains: Seoul Mover

Nov. 2 (Bloomberg) -- Samsung Heavy Industries Co., the world’s second-largest shipyard, rallied the most in eight months in Seoul trading after third-quarter profit exceeded analysts’ estimates.

The stock climbed 6.1 percent to 34,700 won at the close on the Korea Exchange, its steepest gain since Feb. 28. The benchmark Kospi index added 1.1 percent.

Samsung Heavy reported a net income of 277.4 billion won ($254 million) in the quarter ended Sept. 30, the company said in a filing yesterday after the market closed. That topped the 180.6 billion won average of 23 analyst estimates compiled by Bloomberg. A rebound in the liquefied-natural-gas ship market may drive new orders, according to Tong Yang Securities Inc.

“The company’s profit margin is the highest within the industry, aided by its flagship drill ships that account for 30 to 40 percent of its revenue,” Lee Jae Won, an analyst at Tong Yang Securities, wrote in a note today. “Industry fundamentals appear to be in better shape than previously thought.”

The stock was upgraded to buy from outperform at Daiwa Securities Group Inc., which said in a note that the company will likely lead its peers in fourth-quarter orders.

Samsung Heavy shares have surged 24 percent this year, outpacing a 5.1 percent advance in the Kospi.

To contact the reporter on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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