Brokerage : DS Investment & Securities
Analyst : Surim Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 183,000 (Upgraded)
Core Momentum : Full-year 2026 operating profit forecast is revised upward to KRW 156T, driven by sustained memory ASP hikes centered on server DRAM and projected 3x YoY growth in HBM revenue supported by February HBM4 customer shipments.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 183,000 (13.9% upside potential based on the January 29, 2026 closing price of KRW 160,700)
- Key Valuation Multiples (2026F): P/E 6.9x, P/B 2.0x, ROE 29.8%, EV/EBITDA 4.2x
- Per-Share Metrics (2026F): EPS KRW 23,478 (YoY +232.2%)
- Annual Financial Projections:
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit (Controlling) KRW 33.62T
- 2025F: Revenue KRW 333.68T, Operating Profit KRW 43.62T, Net Profit (Controlling) KRW 43.57T
- 2026F: Revenue KRW 466.76T, Operating Profit KRW 156.42T (KRW 156T cited in text, YoY +259%, OPM 33.5%), Net Profit (Controlling) KRW 141.38T
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review:
- Final Revenue of KRW 93.8T (+24% YoY, +9% QoQ) and Operating Profit of KRW 20.1T (+209% YoY, +65% QoQ, OPM 21%), in line with estimates (KRW 20.3T)
- Operating Profit by Segment: DS KRW 16.4T (DRAM KRW 15T, NAND KRW 2.6T, LSI/Foundry loss of KRW 1.2T), DX KRW 1.3T, SDC KRW 2.0T, Harman KRW 0.3T
- Shipments & Pricing: DRAM bit growth +2% and ASP +40% QoQ / NAND bit growth -4% and ASP +20% QoQ, validating profit improvements via pricing gains and product mix
- 1Q26 Earnings Outlook:
- Projected 1Q Operating Profit of KRW 31.5T (+16% QoQ, OPM 29%)
- DRAM ASP (led by server DRAM) projected +32% QoQ, and NAND ASP projected +12% QoQ
- 2026 Memory Catalysts & Capital Allocation:
- Semiconductor Division Growth: Semiconductor operating profit projected to reach KRW 138T (+452% YoY, OPM 54%) on HBM recovery and commodity pricing strength
- HBM4 Shipments: Shipments of 11.7Gbps HBM4 products scheduled to commence in February, driving projected 2026 HBM revenue growth of over 3x YoY
- Capex & Shareholder Returns: 2025 DS Capex finalized at KRW 47.5T; 2026 strategy maintains conservative spending for Foundry/SDC while expanding Memory Capex. Allocation of 50% of 2025 FCF (KRW 36.5T) for dividends and share cancellations reconfirmed, with remaining cancellation schedules to be finalized in 1Q26
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an enterprise where strong semiconductor performance drives company-wide earnings growth toward KRW 156T in 2026 operating profit, supported by server DRAM price strength and the February ramp of 11.7Gbps HBM4 shipments, despite cost inflation pressures in non-semiconductor B2C divisions. This perspective places primary emphasis on robust commodity memory pricing leverage, triple-digit HBM revenue growth, and shareholder return execution utilizing 50% of 2025 FCF for dividends and share cancellations.
To verify whether this investment thesis continues to materialize, key verification points include whether realized 1Q operating profit (KRW 31.5T) and DRAM/NAND ASP gains (DRAM +32%, NAND +12%) meet forecasts, whether 11.7Gbps HBM4 customer shipments commence on schedule in February to drive a 3x increase in full-year HBM revenue, and whether the remaining share cancellation schedule is finalized during 1Q26. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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