Brokerage : Kiwoom Securities
Analyst : Yu-ak Park
Investment Rating : BUY (Maintain)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Driven by surging commodity DRAM and NAND ASPs, supply tightness from advanced node migrations, and triple-digit growth in HBM earnings, 1Q26 operating profit is projected at KRW 32T and full-year 2026 operating profit at KRW 172T.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Sector Top Pick maintained, Target Price maintained at KRW 200,000 (Current price as of January 29, 2026: KRW 160,700)
- Key Valuation Multiples (2026F): P/E 8.1x, P/B 1.96x, ROE 27.1%, EV/EBITDA 1.4x, Dividend Yield (25E) 2.8%
- Per-Share Metrics (2026F): EPS KRW 19,687 (YoY +201.5%), BPS (25E) KRW 64,814
- Annual Financial Projections:
- 2023: Revenue KRW 258.94T, Operating Profit KRW 6.57T, Net Profit (Controlling) KRW 14.47T
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit (Controlling) KRW 33.62T
- 2025F: Revenue KRW 333.61T, Operating Profit KRW 43.64T, Net Profit (Controlling) KRW 44.28T
- 2026F: Revenue KRW 500.10T (KRW 500T in text, YoY +50%), Operating Profit KRW 171.94T (KRW 172T in text, YoY +294%, OPM 34.4%), Net Profit (Controlling) KRW 131.40T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Outlook (Anticipated Consensus Beat):
- Projected Revenue of KRW 114T (+21% QoQ) and Operating Profit of KRW 32T (+61% QoQ), significantly beating consensus (Revenue KRW 105T, Operating Profit KRW 28.3T)
- Commodity DRAM and NAND ASP projected to surge +45% QoQ and +50% QoQ, respectively
- Market Drivers: DRAM node transition (1a, 1b → 1c nm), Gen-9 V-NAND migration, and surging demand for eSSD and server DRAM bolster memory pricing leverage
- 1Q26 Operating Profit by Division: DS KRW 31T (jumping from KRW 16T in 4Q25, +87% QoQ), SDC KRW 0.3T (-84% QoQ), MS/NW KRW 1.9T (flat QoQ), VD/DA loss of KRW 0.3T (loss continues)
- 2026 Full-Year Projections & HBM Growth:
- 2026 blended ASP growth projected at +109% YoY for commodity DRAM and +105% YoY for NAND
- Rising commodity DRAM pricing and margins provide leverage in HBM4 pricing discussions, with full-year HBM revenue and operating profit projected to surge 3.2x and 6.3x YoY, respectively
- Foundry/System LSI division projected to record an annual operating loss of approximately KRW 4T, with potential for loss reduction supported by rising advanced node fab utilization
- Valuation & Share Price Drivers:
- Upward share momentum driven by commodity memory price hikes, HBM4 price forecast upgrades, and foundry operational recovery
- Differentiated share price performance expected as the stock remains the most undervalued among the top 3 DRAM manufacturers
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a memory-led growth enterprise poised to achieve KRW 32T in 1Q26 operating profit and KRW 172T in FY26 operating profit, propelled by steep commodity DRAM/NAND ASP hikes from 1c DRAM/Gen-9 NAND transitions alongside a 3.2x surge in HBM revenue and 6.3x surge in HBM operating profit. This perspective places primary emphasis on pricing leverage in HBM4 negotiations created by surging commodity memory profitability and the stock’s pronounced valuation discount relative to global DRAM peers, which outweighs near-term losses in consumer electronics (VD/DA) and non-memory divisions.
To verify whether this investment thesis continues to materialize, key verification points include whether realized 1Q consolidated operating profit (KRW 32T) and DS division operating profit (KRW 31T) meet forecasts, whether full-year DRAM (+109% YoY) and NAND (+105% YoY) ASP gains are realized, and whether HBM revenue and profit expand by 3.2x and 6.3x alongside loss reductions in non-memory through higher advanced node utilization. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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