Brokerage : Eugene Investment & Securities
Analyst : So-jeong Yim
Investment Rating : BUY (Maintained)
Target Price : KRW 180,000 (Upgraded)
Core Momentum : Full-year 2026 operating profit forecast is revised upward to KRW 143T as legacy DRAM price increases and a persistent supplier-favorable market environment drive projected 2026 memory operating margins above 50%, lifting the target price to KRW 180,000.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 180,000 (Previous KRW 170,000; current price as of January 8, 2026: KRW 138,800)
- Valuation Methodology: Applied a Target P/B of 2.2x reflecting upward earnings revisions
- Key Valuation Multiples (2026E): P/E 6.4x, P/B 1.7x, ROE 26.6%, EV/EBITDA 3.7x, Dividend Yield (2025F) 1.0%
- Per-Share Metrics (2026E): EPS KRW 21,659 (YoY +196.8%)
- Annual Financial Projections:
- 2024A: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit KRW 34.45T
- 2025E: Revenue KRW 333.95T, Operating Profit KRW 43.70T (KRW 43T in summary table), Net Profit KRW 44.33T
- 2026E: Revenue KRW 492.21T, Operating Profit KRW 143.82T (KRW 143T in summary table, raised from KRW 109T), Net Profit KRW 131.72T
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Preliminary Earnings Review (Consensus Beat):
- Preliminary Revenue of KRW 93T (+22.7% YoY, +8.0% QoQ) and Operating Profit of KRW 20T (+208.2% YoY, +64.3% QoQ), beating market consensus
- Operating Profit by Division (3Q25 → 4Q25): DS KRW 5.5T → KRW 16.4T, SDC KRW 1.2T → KRW 2.0T, MX/NW KRW 3.6T → KRW 1.3T, VD/CE/Harman KRW 1.9T → KRW 0.5T (VD/CE KRW 0.1T, Harman KRW 0.4T)
- Division Details & Margin Dynamics:
- Memory (KRW 17.5T): Profit surged led by legacy DRAM, with 4Q OPM estimated at 46%; supplier-favorable conditions are projected to push 2026 memory margins above 50%
- System LSI / Foundry (loss of KRW 1.2T): Revenue grew for three consecutive quarters, but operations remained in a deficit
- SDC (KRW 2.0T): Solid earnings growth driven by strong shipments to North American clients
- Consumer Hardware (MX/NW, VD/CE, Harman): Profitability contracted due to steep component BOM cost inflation, despite favorable FX conditions
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an enterprise achieving KRW 143.82T in 2026 operating profit (revised upward from KRW 109T), propelled by steep legacy DRAM price increases and favorable supply-demand conditions pushing memory margins beyond 50%, despite ongoing losses in non-memory and component cost pressures in finished goods (MX/VD/CE). This perspective places primary emphasis on the strong profitability surge of the Memory division (4Q OPM estimated at 46%) and the sustained supplier-favorable market structure, rather than margin compression in downstream hardware.
To verify whether this investment thesis continues to materialize, key verification points include whether Memory division operating margins successfully exceed 50% in 2026, whether full-year consolidated operating profit reaches the upgraded target (KRW 143.82T), whether consecutive quarterly revenue growth in Foundry/System LSI leads toward narrowing operating deficits, and how effectively downstream consumer divisions defend margins against component price increases. These developments can be tracked through upcoming quarterly earnings announcements, official IR materials, regulatory filings, and periodic financial reports.
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