Brokerage : iM Securities
Analyst : Myung-sub Song
Investment Rating : Buy (Maintain)
Target Price : KRW 200,000 (Upgraded)
Core Momentum : Full-year 2026 operating profit is projected to reach KRW 211.2T alongside 1Q26 operating profit of KRW 42.3T, driven by unprecedented price surges including an 85% jump in 1Q26 legacy DRAM contract prices and recovering HBM competitiveness.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained, 12-Month Target Price upgraded to KRW 200,000 (24.5% upside potential based on the January 29, 2026 closing price of KRW 160,700)
- Valuation Methodology: Applied a historical peak P/B multiple of 2.2x to FY26 estimated BPS of KRW 89,613 as FY26 ROE reaches historical peak levels
- Key Valuation Multiples (2026E): P/E 6.8x, P/B 1.8x, ROE 30.8%, EV/EBITDA 3.1x, Dividend Yield 1.0%
- Per-Share Metrics (2026E): EPS KRW 23,775, BPS KRW 89,613
- Annual Financial Projections:
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit KRW 33.62T
- 2025E: Revenue KRW 333.61T, Operating Profit KRW 43.60T, Net Profit KRW 44.12T
- 2026E: Revenue KRW 526.47T (KRW 526.5T in text, YoY +58%), Operating Profit KRW 211.23T (KRW 211.2T in text, YoY +384%), Net Profit KRW 161.50T
- 2027E: Revenue KRW 473.82T, Operating Profit KRW 151.96T, Net Profit KRW 121.53T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Outlook (Operating Profit of KRW 42.3T):
- Projected Revenue of KRW 120.6T (+29% QoQ) and Operating Profit of KRW 42.3T (+111% QoQ)
- Memory Division: Projected 1Q26 Revenue of KRW 61.3T (+65% QoQ) and Operating Profit of KRW 41.4T (+131% QoQ)
- Other Divisions: Sluggish profitability expected to persist near term due to seasonality and memory BOM cost burdens in set hardware
- Unprecedented 1Q26 Price Surges & Trajectory:
- Contract price negotiations postponed past February point toward legacy DRAM and NAND contract price increases far exceeding previous expectations (sales focused on price-accepting clients)
- DRAM Price Path: Assuming 1Q26 legacy DRAM contract prices surge +85% QoQ followed by +15% (10–15%) in 2Q26 and +5% in 3Q26, legacy DRAM prices per 1Gb would reach the historic peak of $1
- 4Q25 DRAM ASP increase (+40%) was driven by HBM sales expansion and premium-priced server DRAM shipments to select customers in China, which may moderate 1Q26 ASP gains relative to peers due to a high base effect
- Shipment Volume & Cycle Longevity:
- 1Q26 Bit Growth: DRAM expected to grow slightly QoQ, while NAND grows in the mid-single digits QoQ
- P/B band normalizes toward historical levels supported by HBM recovery and memory price increases extending at least through 3Q26
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a memory-led earnings grower achieving KRW 42.3T in 1Q26 operating profit and KRW 211.2T in FY26 operating profit, powered by an 85% surge in 1Q legacy DRAM contract prices extending into 3Q26 and recovering HBM competitiveness, despite cost pressures and off-season sluggishness in non-memory divisions. This perspective places primary emphasis on operating leverage from legacy DRAM pricing reaching historical peak levels and the application of a 2.2x peak P/B multiple supported by FY26 ROE (30.8%), rather than near-term margin headwinds in finished goods.
To verify whether this investment thesis continues to materialize, key verification points include whether the projected 1Q legacy DRAM contract price surge (+85%) and consolidated operating profit (KRW 42.3T) are realized, whether the sequential pricing gains in 2Q (+10–15%) and 3Q (+5%) hold, and whether HBM competitiveness recovery continues as anticipated. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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