Brokerage : DS Investment & Securities (Company Analysis)
Analyst : Surim Lee (Semiconductor)
Investment Rating : BUY (Maintained)
Target Price : KRW 300,000 (Raised)
Core Momentum : Delayed actual supply additions driven by HBM capacity allocation and expanding long-term supply agreements are raising the memory margin floor and supporting continued earnings growth.
📊 1. [Valuation & Key Financial Metrics]
Key Investment & Valuation Metrics
- Base Stock Price (2026-04-06): KRW 193,100
- Target Price: KRW 300,000 (Raised, +55.4% upside potential)
- Investment Rating: BUY
- Market Cap (Common Stock): KRW 1,143.08 Trillion (5,919.64 million shares outstanding, 48.4% foreign ownership)
Annual Financial Outlook & Forecasts (K-IFRS Consolidated)
- 2023(A): Revenue KRW 258.94T, Operating Profit KRW 6.57T (OPM 2.5%), Pre-tax Profit KRW 11.01T, Net Profit KRW 14.47T, EPS KRW 2,225 (-75.2%), ROE 4.1%, P/E 35.3x, P/B 1.5x, EV/EBITDA 9.7x
- 2024(A): Revenue KRW 300.87T, Operating Profit KRW 32.73T (OPM 10.9%), Pre-tax Profit KRW 37.53T, Net Profit KRW 33.62T, EPS KRW 5,433 (+144.2%), ROE 9.0%, P/E 9.8x, P/B 0.9x, EV/EBITDA 3.5x
- 2025(A): Revenue KRW 333.61T, Operating Profit KRW 43.60T (OPM 13.1%), Pre-tax Profit KRW 50.06T, Net Profit KRW 43.56T, EPS KRW 7,065 (+30.0%), ROE 10.9%, P/E 26.9x, P/B 3.2x, EV/EBITDA 12.7x
- 2026(F): Revenue KRW 624.91T, Operating Profit KRW 298.54T (OPM 47.8%), Pre-tax Profit KRW 304.72T, Net Profit KRW 264.96T, EPS KRW 44,183 (+525.4%), ROE 49.4%, P/E 4.4x, P/B 2.0x, EV/EBITDA 2.8x
- 2027(F): Revenue KRW 728.98T, Operating Profit KRW 378.21T (OPM 51.9%), Pre-tax Profit KRW 384.60T, Net Profit KRW 334.43T, EPS KRW 56,514 (+27.9%), ROE 40.5%, P/E 3.4x, P/B 1.3x, EV/EBITDA 1.5x
🚀 2. [Market Opportunities & Business Outlook]
1Q26 Earnings Review & Segment Breakdown
- 1Q26 Consolidated Performance: Revenue of KRW 133T (+68% YoY, +42% QoQ) and Operating Profit of KRW 57.2T (+755% YoY, +185% QoQ, OPM 43%), significantly exceeding initial estimates and consensus.
- Device Solutions (DS Segment / OP estimated at KRW 53.3–53.4T):
- DRAM: OP estimated at KRW 43.6T (OPM 79%), Bit Growth +7%, ASP +95% QoQ.
- NAND: OP estimated at KRW 10.7T (OPM 53%), Bit Growth +5%, ASP +85% QoQ.
- Combined memory operating profit reached an estimated KRW 54.3T, driven by pricing surges and a favorable product mix with higher server exposure.
- System LSI/Foundry: Despite higher utilization, increased cost burdens led to an estimated operating loss of -KRW 0.9T, comparable to the previous quarter.
- Other Business Units:
- DX Segment: Operating Profit estimated at KRW 2.7T (MX/Network KRW 2.6T, VD/CE KRW 0.1T). Smartphone shipments were solid at 59 million units, but rising memory bill-of-materials costs are expected to weigh on profitability starting in 2Q26.
- SDC (Display): Operating Profit estimated at KRW 0.6T.
- Harman: Operating Profit estimated at KRW 0.4T.
Medium-Term Dynamics & Earnings Sustainability
- Despite new CapEx investments, genuine market supply expansion is projected to begin only in 2028 due to capacity absorption by HBM.
- Operating profit is expected to grow +27% YoY in 2027, driven by continued memory margin expansion.
- The execution of long-term supply agreements designed to reduce cyclical volatility is structurally elevating the memory margin floor.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a company reducing earnings volatility and elevating its margin floor through HBM-induced supply constraints and long-term contracts, beyond near-term earnings beats. Rather than focusing solely on current profit levels, the overarching perspective emphasizes that the delayed realization of actual industry supply additions until 2028, along with extended earnings sustainability and a higher margin floor, has yet to be sufficiently reflected in the stock price.
To verify the ongoing validity of this investment thesis, key variables to monitor include whether the memory margin expansion continues through 2027, and whether long-term supply agreements (LTAs) are effectively secured and sustained to reduce cyclical fluctuations. These developments can be verified through future quarterly earnings conference calls, official IR materials, regulatory filings on DART/KRX, and periodic financial reports.
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