Brokerage : Mirae Asset Securities
Analyst : Young-gun Kim, Se-hoon Jung
Investment Rating : Buy (Maintained)
Target Price : KRW 247,000 (Upgraded)
Core Momentum : Supported by HBM4 customer qualification completion and commodity memory ASP increases, target price is raised by 30% to KRW 247,000 as foundry-memory collaboration begins through 4nm base die shipments.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained, Target Price upgraded by 30% to KRW 247,000 (Previous KRW 187,000; 53.7% upside potential based on the January 29, 2026 closing price of KRW 160,700)
- Valuation Methodology: Sum-of-the-Parts (SOTP) valuation yielded a target enterprise value of KRW 1,653T (Memory division KRW 1,310T), converting to 2026F multiples of 11.6x P/E and 3.1x P/B
- Key Valuation Multiples (2026F): P/E 7.0x, P/B 1.9x, ROE 31.2%, Dividend Yield 0.9%
- Per-Share Metrics (2026F): EPS KRW 23,028
- Annual Financial Projections:
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit (Controlling) KRW 33.62T
- 2025F: Revenue KRW 333.57T, Operating Profit KRW 43.63T, Net Profit (Controlling) KRW 44.28T
- 2026F: Revenue KRW 499.95T (KRW 496T cited in text), Operating Profit KRW 166.82T (KRW 163T cited in text, OPM 33.4%), Net Profit (Controlling) KRW 155.11T
- 2027F: Revenue KRW 560.29T, Operating Profit KRW 195.85T (OPM 35.0%), Net Profit (Controlling) KRW 186.36T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Outlook:
- Projected Revenue of KRW 114T (+21.8% QoQ) and Operating Profit of KRW 32T (+58.1% QoQ)
- DS division Revenue (+23.5% QoQ) and Operating Profit (+58.2% QoQ) growth expected to fully offset the MX revenue decline (-24.0% QoQ) caused by the seasonal absence of new flagship launches
- 2026 Memory Division Outlook & Shipments:
- Memory division profit growth is projected to lead overall corporate earnings expansion
- DRAM and NAND bit growth projected at +22.6% and +19.9%, alongside ASP increases of +34.7% and +22.2%, supported by HBM volume expansion and strong commodity memory dynamics
- Semiconductor Operating Environment & Strengths:
- HBM4 Competitiveness: HBM4 passed customer qualification without redesign issues and will reflect in revenue starting in 1Q26; established mass production capability for 16-stack hybrid bonding; HBM revenue projected to increase over 130% from $7.3B in 2025 to $17.0B in 2026
- Capacity Leadership: Strong demand across server DRAM, doubled LPDDR5X content per CPU in Company N’s new models, and widening TLC price premiums over QLC for KV Cache offloading SSDs capitalize on Samsung’s maximum capacity strengths
- Foundry-Memory Synergy: Initial shipments of 4nm FinFET-applied HBM4 base dies commenced with high production yields, establishing a collaborative business model ahead of 2nm adoption for custom HBM4E base dies in 2027
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as entering a full-scale memory normalization phase to achieve 2026 full-year operating profit in the mid-KRW 160T range, underpinned by completed HBM4 customer qualifications and robust demand across server DRAM, LPDDR5X, and high-performance TLC SSDs despite off-season smartphone softness. This perspective places primary significance on industry-leading capacity utilization and the establishment of a verified memory-foundry collaboration model through 4nm base die production, rather than near-term consumer hardware seasonality.
To verify whether this investment thesis continues to materialize, key verification points include whether realized 1Q operating profit (KRW 32T) and full-year DRAM (+34.7%) / NAND (+22.2%) ASP projections are met, whether HBM4 revenue recognition begins in 1Q26 to reach the $17.0B annual target, and whether 4nm HBM4 base die shipments proceed smoothly to lay the groundwork for 2nm HBM4E collaboration in 2027. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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