Brokerage : Hana Securities
Analyst : Rok-ho Kim (RA: Kyung-gyu Kim)
Investment Rating : BUY (Maintained)
Target Price : KRW 300,000 (Maintained)
Core Momentum : Full-year operating profit is projected to reach KRW 355T and enter the KRW 100T quarterly profit era, supported by sustained DRAM/NAND ASP increases and expanding LPDDR adoption across AI systems in 2H.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price maintained at KRW 300,000 (Current price as of report date: KRW 196,500)
- Key Valuation Multiples (2026F): P/E 4.60x, P/B 1.83x, ROE 50.44%, EV/EBITDA 2.30x
- Per-Share Metrics (2026F): EPS KRW 41,942 (YoY +538.97%), BPS KRW 104,281, DPS KRW 1,668
- Annual Financial Projections:
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit KRW 33.62T
- 2025: Revenue KRW 333.61T, Operating Profit KRW 43.60T, Net Profit KRW 44.26T
- 2026(F): Revenue KRW 667.58T (KRW 668T in text, YoY +100%), Operating Profit KRW 354.78T (upgraded 55% to KRW 355T in text, YoY +711%), Net Profit KRW 282.50T
- 2027(F): Revenue KRW 778.05T, Operating Profit KRW 450.72T, Net Profit KRW 357.89T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Preliminary Results Review:
- Company-wide Revenue reached KRW 133T (YoY +68%, QoQ +42%), Operating Profit reached KRW 57.2T (YoY +755%, QoQ +185%)
- Memory Division: Operating profit estimated to exceed KRW 53T. Due to supply constraints and lean inventories, DRAM ASP rose +81% (OP margin ~80%); NAND bit growth reached +7% with ASP rising +82% (OP margin exceeding 60%)
- Other Business Units (Operating Profit): System LSI & Foundry reported a KRW 1.0T operating loss, MX/NW recorded KRW 2.9T, SDC (Display) KRW 0.7T, VD/Appliances KRW 0.3T, Harman KRW 0.3T
- 2Q26 & 2026 Outlook:
- Pricing Assumptions: Projects 2Q26 DRAM ASP +38% and NAND ASP +50%. Server hyperscalers and mobile OEMs continue to accept price increases
- AI Hardware Demand: Preemptive inventory building observed ahead of 2H LPDDR adoption across various AI systems (CPU, DPU, LPX)
- Quarterly Earnings Trajectory: Operating profit expected to approach KRW 90T in 2Q26 and exceed KRW 100T starting in 3Q26
- Contract Structure & Cash Flow:
- Long-Term Agreements (LTAs) maintain open-ended pricing ranges rather than rigid caps, preserving pricing upside while dampening earnings volatility
- Robust Free Cash Flow (FCF) generation underpins expectations for shareholder return programs
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a memory-centric profit expander advancing toward an unprecedented KRW 355T annual and KRW 100T quarterly operating profit run-rate, primarily powered by severe supply constraints and sharp DRAM and NAND price increases. This perspective places decisive weight on the massive earnings leverage of the core memory division and volatility reduction via long-term contracts, which significantly overshadows finished-goods cost inflation and ongoing losses in the System LSI and foundry segments.
To verify whether this investment thesis materializes as projected, key verification points include whether realized DRAM and NAND ASP increases in 2Q and 2H meet the report’s assumptions, whether the broadening adoption of LPDDR in AI hardware and preemptive volume securing continue to track expectations, and whether the open-ended LTA structure effectively translates into sustained FCF accumulation and concrete shareholder returns. These factors can be monitored through future quarterly earnings releases, official IR presentations, regulatory filings, and periodic business reports.
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