Brokerage : Mirae Asset Securities
Analyst : Younggun Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 480,000 (Upgraded)
Core Momentum : Substantial upward revisions in operating profit forecasts driven by surging Mobile LPDDR and NAND pricing momentum, supported by structural ROE expansion averaging 46% over the next three years.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY maintained; Target Price raised by +20.0% to KRW 480,000 from KRW 400,000 (73.9% upside potential based on May 20, 2026 closing price of KRW 276,000)
- Valuation Methodology: Derived via SOTP methodology; the Target Price implies a 2026F P/B multiple of 4.4x (below the memory industry average of 6.4x), justified by a 3-year average forward ROE projection of 46% (vs. 10-year historical average of 13%)
- Valuation Multiples (Current Price): 2026F P/E 6.1x, P/B 2.5x
- Key Financial Metrics & Forecasts (2024 ~ 2028F):
- 2024: Revenue KRW 300.87T, OP KRW 32.73T, Net Profit KRW 33.62T, EPS KRW 4,950, ROE 9.0%, P/E 10.7x, P/B 0.9x, Div. Yield 2.7%
- 2025: Revenue KRW 333.61T, OP KRW 43.60T, Net Profit KRW 44.26T, EPS KRW 6,564, ROE 10.8%, P/E 18.3x, P/B 1.9x, Div. Yield 1.4%
- 2026F: Revenue KRW 708.88T, OP KRW 371.90T (vs. consensus KRW 348.07T), Net Profit KRW 306.35T, EPS KRW 45,482, ROE 53.0%, P/E 6.1x, P/B 2.5x, Div. Yield 4.2%
- 2027F: Revenue KRW 909.71T, OP KRW 500.43T, Net Profit KRW 421.64T, EPS KRW 62,599, ROE 46.6%, P/E 4.4x, P/B 1.7x, Div. Yield 3.1%
- 2028F: Revenue KRW 981.70T, OP KRW 513.45T, Net Profit KRW 458.12T, EPS KRW 68,014, ROE 35.7%, P/E 4.1x, P/B 1.2x, Div. Yield 3.1%
🚀 2. [Market Opportunities & Business Outlook]
- Accelerating Price Increases in Mobile DRAM and NAND:
- 2026F demand growth forecasts revised upward in May: Server volume growth +22.3% (from +22.1%) and Enterprise SSD volume growth +41.5% (from +39.1%)
- Average mobile DRAM content per box increasing due to production cuts in low-end smartphones, alongside upcoming SOCAMM adoption driven by NVIDIA Vera
- 2Q26 contract price outlook: LPDDR5X (16GB) QoQ +81% (vs. 1Q26 +58%), LPDDR4X (8GB) QoQ +72% (vs. 1Q26 +57%), UFS (512GB) QoQ +80% (vs. 1Q26 +97%)
- Upward Revisions to ASP and Earnings Forecasts:
- DRAM Quarterly ASP Trajectory: 2Q26 +41% (vs. +30% prev.), 3Q26 +10% (vs. +15% prev.), 4Q26 +6% (vs. +5% prev.), maintaining elevated pricing levels despite sequential rate moderation
- NAND Quarterly ASP Trajectory: 2Q26 +45% (vs. +30% prev.), 3Q26 +15% (vs. +15% prev.), 4Q26 +10% (vs. +10% prev.)
- Operating Profit Estimates: 2Q26F raised to KRW 89T (from KRW 75T), 2026F raised to KRW 372T (from KRW 332T), and 2027F raised to KRW 500T (from KRW 450T)
- Robust pricing strength outpaces labor cost concerns, lifting DS division 2026F/2027F OPM projections by +2.5%pt and +1.5%pt, respectively
- Operational Considerations: Stable retention and operational normalizations of core engineering talent remain key operational focus points amidst strong external demand
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an industry frontrunner whose formidable pricing power and global memory demand strength far outweigh temporary internal labor considerations. This perspective highlights the company’s structural ROE expansion—projected to average 46% over the next three years—and sustained high pricing levels across mobile DRAM and NAND as the primary drivers justifying a higher valuation multiple.
To determine whether this investment thesis unfolds as anticipated, key verification checkpoints include the sustained sequential realization of DRAM and NAND ASP increases across upcoming quarters, actual delivery growth in server and Enterprise SSD segments, and the stable retention and productivity of core engineering operations. These indicators can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory disclosures on DART/KRX.
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