Brokerage : Mirae Asset Securities
Analyst : Young-gun Kim
Investment Rating : Buy (Maintained)
Target Price : KRW 300,000 (Maintained)
Core Momentum : Operating leverage driven by DRAM ASP hikes and lower cash costs, combined with expectations that an ROE of at least 30% can be sustained if LTA price bands hold even as price increases moderate, underpins strong earnings visibility.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained, Target Price maintained at KRW 300,000 (61.1% upside potential based on the April 3, 2026 closing price of KRW 186,200)
- Valuation Methodology: Sum-of-the-Parts (SOTP) valuation applied (Operating Value KRW 1,865.5T + Equity Value KRW 106.5T + Net Cash KRW 104.2T, yielding a Target Market Cap of KRW 2,013T)
- Key Valuation Multiples (2026F): P/E 5.4x, P/B 1.9x, ROE 42.8%, Dividend Yield 4.7%
- Per-Share Metrics (2026F): EPS KRW 34,316 (2027F EPS KRW 46,291, 2028F EPS KRW 50,529; BPS not specified in summary table)
- Annual Financial Projections:
- 2024: Revenue KRW 300.87T, Operating Profit KRW 32.73T, Net Profit (Controlling) KRW 33.62T
- 2025: Revenue KRW 333.61T, Operating Profit KRW 43.60T, Net Profit (Controlling) KRW 44.26T
- 2026F: Revenue KRW 627.97T, Operating Profit KRW 303.96T (exceeding consensus of KRW 211.41T, OPM 48.4%), Net Profit (Controlling) KRW 231.14T
- 2027F: Revenue KRW 763.17T, Operating Profit KRW 399.27T (OPM 52.3%), Net Profit (Controlling) KRW 311.80T
- 2028F: Revenue KRW 814.62T, Operating Profit KRW 406.62T (OPM 49.9%), Net Profit (Controlling) KRW 340.34T
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Preview:
- Projected Operating Profit raised by 13.2% to KRW 46.8T (DS KRW 42.6T, DX KRW 3.6T, etc.)
- DRAM Metrics Upgrade: DRAM blended ASP growth revised up to 64.0% (+8.6%pt from 55.4%); cash cost assumption lowered, lifting DRAM OPM estimate to 73% (+16%pt QoQ)
- Operating Leverage: Period to observe the maximization of operating leverage via advanced node yield stabilization and product mix amid capacity/inventory constraints
- 2Q26 Growth Catalysts:
- Low bit growth (B/g) with high ASP in 1Q indicates customers failed to secure sufficient volumes; 2Q is expected to see simultaneous shipment growth and price increases
- LTA Structure & Industry Landscape:
- Expansion of 3-year-plus Long-Term Agreements (LTAs) with Big Tech (focus on securing volume, upfront cash deposits, quarterly price renegotiations to adjust collateral ratios)
- Contracts incorporate price fluctuation bands (caps/floors) with collateral volume adjustments if market prices deviate
- Increased proportion of long-term contract clients reduces market share competition among suppliers across the broader industry
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics not as a cyclical vendor dependent solely on short-term price momentum, but as an enterprise undergoing structural improvements capable of sustaining an ROE of at least 30% if LTA price bands are maintained, supported by operating leverage from advanced node yield stabilization and product mix optimization. This perspective places primary significance on cash cost reductions, operating leverage, and reduced market share competition via LTA structures, rather than market concerns regarding the potential moderation of price increase rates.
To verify whether this investment thesis continues to materialize, key verification points include whether 2Q delivers simultaneous shipment growth and price increases to sustain operating leverage, whether advanced node yield stabilization translates into product mix optimization, and whether maintaining LTA price bands effectively sustains ROE levels above 30%. These factors can be monitored through upcoming quarterly earnings announcements, official IR materials, regulatory filings, and periodic financial reports.
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