Brokerage : Eugene Investment & Securities
Analyst : So-jeong Yim
Investment Rating : BUY (Maintained)
Target Price : KRW 210,000 (Upgraded)
Core Momentum : Driven by substantial DRAM and NAND profitability growth from favorable supply-demand conditions and expanding HBM adoption by North American clients based on advanced node yields, the 2026 operating profit forecast is upgraded to KRW 148T, raising the target price to KRW 210,000.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 210,000 (Previous KRW 180,000; current price as of January 29, 2026: KRW 160,700)
- Valuation Methodology: Applied a Target P/B of 2.5x alongside upward revisions to earnings forecasts
- Key Valuation Multiples (2026E): P/E 7.2x, P/B 2.0x, ROE 27.3%, EV/EBITDA 4.2x, Dividend Yield 0.9%
- Per-Share Metrics (2026E): EPS KRW 22,316 (YoY +199.2%)
- Annual Financial Projections:
- 2024A: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit KRW 34.45T
- 2025A: Revenue KRW 334.08T, Operating Profit KRW 43.74T, Net Profit KRW 45.11T
- 2026E: Revenue KRW 478.28T (KRW 478T cited in text), Operating Profit KRW 148.83T (KRW 148T cited in text, raised from KRW 143T), Net Profit KRW 135.78T
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review by Segment:
- Operating Profit by Division (4Q24 → 4Q25): Semiconductor KRW 2.9T → KRW 16.4T, SDC KRW 0.9T → KRW 2.0T, MX/NW KRW 2.1T → KRW 1.9T, VD/DA KRW 0.2T → loss of KRW 0.6T (loss continues), Harman KRW 0.4T → KRW 0.3T
- Margin Trends: While MX/NW profit declined due to mobile BOM cost inflation and VD/DA losses persisted, substantial profitability improvements in DRAM and NAND drove overall consolidated earnings higher under favorable supply-demand conditions
- 2026 Projections & Segment Breakdown:
- Projected Revenue of KRW 478T and Operating Profit of KRW 148T
- Operating Profit by Division: Semiconductor KRW 136.9T, SDC KRW 4.3T, MX/NW KRW 3.8T, VD/DA KRW 1.0T, Harman KRW 1.6T
- Semiconductor earnings expectations expand as AI demand outpaces capacity addition and set OEMs (smartphones and PCs) execute inventory pull-ins (despite inevitable margin compression in mobile, consumer electronics, and SDC from higher component costs)
- Advanced Process Yields & HBM Competitiveness:
- Semiconductor earnings contribution projected to strengthen supported by high yields in advanced processes and expanding HBM adoption by North American clients
- Sustaining memory market leadership backed by high quality and volume mass production capabilities
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an enterprise achieving rapid profit expansion to KRW 148T in 2026 operating profit—led by the Semiconductor division (projected at KRW 136.9T)—as strong AI demand and OEM inventory pull-ins drive substantial DRAM/NAND profitability gains, despite margin pressures in Set (MX/VD/DA) and SDC divisions. This perspective places primary emphasis on expanding North American customer adoption of HBM supported by advanced node yields and high-volume mass production capabilities, which outweighs component cost inflation headwinds in consumer device segments.
To verify whether this investment thesis continues to materialize, key verification points include whether 2026 full-year operating profit (KRW 148T) and Semiconductor division operating profit (KRW 136.9T) meet forecasts, whether high advanced-node yields translate into concrete HBM volume adoption by North American customers, and whether total earnings growth remains resilient against margin compression in downstream hardware divisions. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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