Brokerage : Eugene Investment & Securities
Analyst : So-jeong Yim
Investment Rating : BUY (Maintained)
Target Price : KRW 170,000 (Upgraded)
Core Momentum : Full-year 2026 operating profit forecast is upgraded to KRW 109.83T, driven by persistent demand and ASP strength in legacy DRAM, industry-leading idle capacity for flexible near-term demand fulfillment, and memory pricing gains extending through 3Q26, lifting the target price to KRW 170,000.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 170,000 (Previous KRW 150,000; current price as of January 6, 2026: KRW 138,900)
- Valuation Methodology: Applied a Target P/B of 2.2x reflecting upward earnings revisions
- Key Valuation Multiples (2026E): P/E 4.7x, P/B 1.0x, ROE 21.2%, EV/EBITDA 2.0x, Dividend Yield (2025F) 1.0%
- Per-Share Metrics (2026E): EPS KRW 16,597 (YoY +125.8%)
- Annual Financial Projections:
- 2024A: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit KRW 34.45T
- 2025E: Revenue KRW 334.57T, Operating Profit KRW 44.49T (KRW 44T in revision table, raised from KRW 38T), Net Profit KRW 45.02T
- 2026E: Revenue KRW 431.54T, Operating Profit KRW 109.83T (KRW 109T in revision table, raised from KRW 78T), Net Profit KRW 101.83T
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Preview (Significant Consensus Beat Expected):
- Projected Revenue of KRW 96T and Operating Profit of KRW 21T, substantially exceeding market consensus (KRW 16T)
- Robust profitability in the Memory division—driven by persistent strong demand and ASP increases for legacy DRAM—underpins the earnings beat
- Supply-Demand Balance & Idle Capacity Edge:
- Favorable supply-demand dynamics persist across memory makers alongside indicated intentions to raise Capex
- Holding the largest idle capacity relative to peers provides a distinct competitive advantage in meeting near-term demand surges
- Given new fab expansion lead times, the upward trajectory of memory pricing is projected to extend through 3Q26, positioning the company favorably to maximize profitability over this period
- Inference AI Evolution & Product Portfolio Readiness:
- Long-term preference is shifting from compute-intensive architectures toward compute-efficient environments as the AI market centers on inference
- Broadening adoption of diverse memory solutions beyond HBM, including GDDR and custom HBM (cHBM)
- Well-positioned to capture evolving AI demand backed by a broad memory portfolio, high-volume production scale, and stable high manufacturing yields
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an enterprise achieving KRW 21T in 4Q25 operating profit (beating consensus of KRW 16T) and KRW 109.83T in full-year 2026 operating profit, powered by robust legacy DRAM demand, steep pricing gains, and the industry’s largest idle capacity allowing immediate demand responsiveness. This perspective places primary emphasis on the memory pricing up-cycle lasting through 3Q26 due to capacity expansion lead times and broad product capabilities spanning GDDR and cHBM for inference AI, rather than near-term Capex inflation concerns.
To verify whether this investment thesis continues to materialize, key verification points include whether 4Q25 preliminary operating profit (KRW 21T) is achieved, whether the upward trajectory of memory ASPs persists through 3Q26, whether full-year 2026 operating profit reaches the upgraded target (KRW 109.83T), and how effectively expanding demand for inference-oriented solutions like GDDR and cHBM translates into commercial deliveries. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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