Brokerage : Yuanta Securities Korea
Analyst : Gil-hyun Baik (RA: Seok-min Lim)
Investment Rating : BUY (Maintained)
Target Price : KRW 204,000 (Upgraded)
Core Momentum : Driven by continuous commodity memory price hikes and strengthening technology leadership in advanced nodes, 1Q26 operating profit is projected to increase 43.3% YoY (+330.9% QoQ) to KRW 28.8T, supporting a target price upgrade to KRW 204,000.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 204,000 (Previous KRW 187,000; 27% upside potential based on the January 29, 2026 closing price of KRW 160,700)
- Valuation Methodology: Applied a Target PBR of 1.99x to 2027 estimated BPS
- Key Valuation Multiples (2026F): P/E 7.4x, P/B 1.9x, ROE 26.6%, EV/EBITDA 4.2x, Dividend Yield 2.72%
- Per-Share Metrics (2026F): Explicit per-share BPS/EPS figures omitted in summary tables (Controlling net profit estimated at KRW 129.44T)
- Annual Financial Projections:
- 2024A: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit (Controlling) KRW 33.62T
- 2025P: Revenue KRW 333.57T, Operating Profit KRW 43.53T, Net Profit (Controlling) KRW 41.32T
- 2026F: Revenue KRW 514.11T, Operating Profit KRW 165.02T, Net Profit (Controlling) KRW 129.44T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Preview (Consolidated Operating Profit KRW 28.8T):
- Projected Revenue of KRW 115.4T (+45.8% YoY, +23.0% QoQ) and Operating Profit of KRW 28.8T (OPM 25.0%, +43.3% YoY, +330.9% QoQ), beating 1-month market consensus (Revenue KRW 105.4T, Operating Profit KRW 28.2T)
- Semiconductor Division: Projected Revenue of KRW 54.2T (+108.0% YoY, +18.3% QoQ) and Operating Profit of KRW 24.4T (OPM 44.9%, +47.7% YoY, +2150.6% QoQ)
- Memory vs. Non-Memory: Memory combined operating profit projected at KRW 25.6T (OPM 53.7%, +46.9% YoY, +597.6% QoQ), driving company-wide earnings; non-memory operating loss improvements remain limited due to seasonal slowdown in foundry customer demand despite new SoC launches
- Non-Semiconductor Segments: Projected Revenue of KRW 75.9T (+1.8% YoY, +3.9% QoQ) and Operating Profit of KRW 4.7T (OPM 6.2%, -18.1% YoY, +52.6% QoQ), with S26 launch effects in MX partially offsetting consumer set cost pressures and display off-seasonality
- Structural Memory Up-Cycle & Business Catalysts:
- Growing importance of memory in servers and next-generation IT devices indicates entry into a structural industry up-cycle
- Reinforcing technological leadership across advanced memory processes, including HBM
- Potential for further operational and valuation upside depending on the execution speed and timing of the Foundry division turnaround
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a memory-driven growth enterprise achieving KRW 28.8T in 1Q26 operating profit (+43.3% YoY, +330.9% QoQ), underpinned by conventional memory price increases and strengthening advanced node/HBM leadership within a structural up-cycle, despite seasonal non-memory losses and set-division component cost burdens. This perspective places primary emphasis on robust memory profitability driving 2026 full-year operating profit toward KRW 165T, while identifying the execution pace and turnaround timing of the foundry business as potential upside catalysts.
To verify whether this investment thesis continues to materialize, key verification points include whether realized 1Q consolidated operating profit (KRW 28.8T) and Memory segment operating profit (KRW 25.6T) meet forecasts, whether advanced memory technology leadership—including HBM—continues to strengthen, and whether the Foundry division demonstrates tangible progress toward business expansion and operational turnaround. These developments can be monitored through upcoming quarterly earnings announcements, official IR materials, regulatory filings, and periodic financial reports.
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