Brokerage : Mirae Asset Securities
Analyst : Younggun Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 400,000 (Maintained)
Core Momentum : Long-term business visibility and sustained structural ROE expansion driven by a surge in AI datacenter backlogs, expanding long-term supply agreements (LTAs), and elevated memory pricing.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY maintained with a Target Price of KRW 400,000 (49.0% upside potential based on May 8, 2026 closing price of KRW 268,500)
- Valuation Methodology: Derived via Sum-of-the-Parts (SOTP) valuation; the Target Price implies a 2026F P/B multiple of 3.9x, sitting below the memory industry average of 5.7x, which is justified by an average forward ROE projection of 43% for 2026–2028 (vs. 10-year historical average of 13%)
- Valuation Multiples (Current Price): 2026F P/E 6.7x, P/B 2.6x
- 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 664.26T, OP KRW 328.58T, Net Profit KRW 271.28T, EPS KRW 40,275, ROE 48.4%, P/E 6.7x, P/B 2.6x, Div. Yield 3.8% (Preferred 5.6%)
- 2027F: Revenue KRW 844.32T, OP KRW 444.84T, Net Profit KRW 375.73T, EPS KRW 55,783, ROE 44.2%, P/E 4.8x, P/B 1.8x, Div. Yield 3.2%
- 2028F: Revenue KRW 912.65T, OP KRW 456.32T, Net Profit KRW 409.62T, EPS KRW 60,814, ROE 34.6%, P/E 4.4x, P/B 1.3x, Div. Yield 3.2%
🚀 2. [Market Opportunities & Business Outlook]
- AI Value Chain Order Backlog Surge & LTA Proliferation:
- Major AI cloud and datacenter players reported massive 1Q26 backlogs: CoreWeave $99.4B (+48.8% QoQ, ~50x quarterly revenue), Google Cloud $468B (+92.6% QoQ, ~23x revenue), and Amazon AWS $365B (+49.2% QoQ, ~10x revenue)
- Massive backlogs across cloud vendors require secured component procurement, accelerating long-term supply agreements (LTAs)
- Following Sandisk’s three 1Q LTA contracts ($41.6B backlog), Samsung Electronics is engaging in similar long-term supply discussions
- Earnings & Pricing Outlook:
- 2Q26F Earnings: Operating profit estimated at KRW 74.5T (+30.2% QoQ)
- 2Q26F Price & Shipment Assumptions: DRAM ASP +23% / B/G +7%, NAND ASP +30% / B/G +3%
- Annual Operating Profit Projections: 2026F KRW 329T, 2027F KRW 445T
- Shareholder Return: Meeting the minimum dividend payout ratio of 25% in 2026F yields an estimated dividend yield of 3.8% for common shares and 5.6% for preferred shares
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics not as a traditional cyclical memory maker prone to demand volatility, but as an essential supplier cementing medium-to-long term earnings visibility through long-term agreements (LTAs) driven by explosive AI datacenter demand. This perspective places primary significance on the structural transformation of the business model, which supports an elevated 3-year forward average ROE of over 40% alongside high memory pricing levels.
To determine whether this investment thesis unfolds as anticipated, key verification checkpoints include the formal execution and contract terms of datacenter LTAs, the quarterly delivery of projected DRAM and NAND ASP increases and bit growth, and the consistent distribution of dividends meeting the minimum 25% payout ratio. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, and regulatory filings on DART/KRX.
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