Brokerage : iM Securities
Analyst : Myung-sub Song
Investment Rating : Buy (Maintained)
Target Price : KRW 300,000 (Upgraded)
Core Momentum : Supported by sharp memory ASP increases, full-year operating profit and per-share value estimates are revised upward, while the duration of the Iran war and global liquidity trends remain critical determinants of valuation multiples.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained, Target Price upgraded to KRW 300,000 (Upside potential of 52.7% based on the April 7, 2026 closing price of KRW 196,500)
- Valuation Methodology: Applied a historical peak P/B of 3.1x to the FY26 expected BPS of KRW 97,244 (conditional on an early conclusion of the Iran war)
- Key Valuation Multiples (2026E): P/E 5.5x, P/B 2.0x, ROE 43.7%, EV/EBITDA 2.5x, Dividend Yield 0.9%
- Per-Share Metrics (2026E): EPS KRW 34,988, BPS KRW 97,244
- Annual Financial Projections:
- 2025: Revenue KRW 333.61T, Operating Profit KRW 43.60T, Net Profit KRW 44.26T
- 2026E (Financial Table): Revenue KRW 629.05T, Operating Profit KRW 310.15T, Net Profit KRW 235.66T (Text estimate: Revenue KRW 629.0T, Operating Profit KRW 310.1T)
- 2027E: Revenue KRW 597.59T, Operating Profit KRW 241.37T, Net Profit KRW 190.25T
- 2028E: Revenue KRW 657.35T, Operating Profit KRW 265.72T, Net Profit KRW 213.67T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Results Breakdown:
- Revenue reached KRW 133T and Operating Profit KRW 57.2T, driven by surging Memory profits, favorable FX rates, and solid MX/NW performance
- Operating Profit by Division: Memory KRW 54.0T, MX/NW KRW 4.0T (supported by low-cost memory inventory), CE (including Harman) KRW 0.3T, SDC KRW 0.3T, System LSI operating loss of KRW 1.4T
- Memory ASP: 1Q26 ASP estimated at DRAM +90% and NAND +80%. Following the stabilization of 12-layer HBM3E, HBM pricing rose unlike competitors
- 2Q26 Outlook:
- Company-wide Revenue and Operating Profit projected to reach KRW 156.9T and KRW 79.4T, respectively
- Memory Division: Additional 20–40% increase in DRAM/NAND ASP expected to drive Memory operating profit to KRW 78.8T (+46% QoQ)
- Set Division: Profitability expected to contract to or below 1Q levels due to the exhaustion of low-cost inventory and BOM cost pressures
- Macro Environment & Industry Dynamics:
- Shift toward industrial AI server demand sustains strong memory dependency regardless of macroeconomic softness
- A prolonged war in Iran could bring higher oil prices, elevated interest rates, and liquidity contraction, potentially curbing AI Capex growth and lowering applicable valuation multiples
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a memory-led earnings growth company whose per-share book value and operating profit forecasts are being revised upward on the back of DRAM/NAND ASP hikes, despite margin pressures in set divisions. However, alongside strong earnings momentum, this perspective places critical weight on geopolitical tension (the Iran war) and global liquidity trends as key macro variables that could limit valuation multiple expansion.
To verify whether this investment thesis continues to materialize, key verification points include whether realized 2Q DRAM and NAND ASP increases meet the projected range of 20–40%, whether HBM pricing trends remain solid following the stabilization of 12-layer HBM3E, and how the geopolitical situation in Iran and global liquidity conditions affect broader AI Capex growth and memory industry fundamentals. These factors can be monitored through upcoming quarterly earnings reports, official IR materials, regulatory filings, and global macroeconomic indicators.
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