Brokerage : Mirae Asset Securities
Analyst : Young-gun Kim
Investment Rating : Buy (Maintained)
Target Price : KRW 275,000 (Maintained)
Core Momentum : Despite short-term share price declines triggered by geopolitical tensions, valuation appeal is highlighted by resilient DRAM spot pricing, prolonged supply tightness from constrained Capex, and maintained 2026 operating profit estimates of KRW 227T.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained, Target Price maintained at KRW 275,000 (59.7% upside potential based on the March 4, 2026 closing price of KRW 172,200)
- Key Valuation Multiples (2026F): P/E 5.6x (12M forward P/E 5.4x), P/B 1.8x (12M forward P/B 1.8x), ROE 39.9%, Dividend Yield 0.9%
- Per-Share Metrics (2026F): EPS KRW 31,005 (up significantly from KRW 6,566 in 2025F)
- 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 561.73T, Operating Profit KRW 226.56T (KRW 227T in text, YoY +419%, OPM 40.3%), Net Profit (Controlling) KRW 208.84T
- 2027F: Revenue KRW 659.01T, Operating Profit KRW 285.98T (OPM 43.4%), Net Profit (Controlling) KRW 269.90T
🚀 2. [Market Opportunities & Business Outlook]
- Geopolitical Volatility Review (Panic Sell Assessment):
- Following a 20.5% share price decline over 3 trading days post US air strikes on Iran, the decline is viewed as an excessive panic sell with no fundamental impairment
- Valuation multiples contracted to a 12M forward P/E of 5.4x (well below the historical average of 7.3x) and P/B of 1.8x (below the December 2020 peak of 2.0x)
- Memory Pricing & Supply-Demand Dynamics:
- Spot Price Stability: DRAM 16Gb spot prices held steady (+0.08% for DDR5, -0.25% for DDR4), with post-conflict 3-day declines limited to -0.8% and -3.4%
- Demand Insulation: Majority of demand is anchored by Big Tech customers insulated from the conflict, while consumer IT sets have already priced in historic shipment drops
- Supply Bottlenecks: Supply chain uncertainties encourage higher safety inventory targets among customers, while suppliers remain cautious on Capex. 2026F wafer capacity (DRAM +8.5%, NAND -1.0%) falls short of projected demand bit growth (DRAM +24.8%, NAND +14.8%), extending supply tightness
- Maintained Earnings Outlook:
- Forecasts maintained for 1Q26F Operating Profit of KRW 37.4T (+86.2% QoQ) and FY26 Operating Profit of KRW 227T (+419% YoY)
- Logistics cost exposure from the Strait of Hormuz has minimal impact as the home appliance division contributes only 0.5% to total operating profit
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as an enterprise with intact fundamental earnings power (projected 2026 operating profit of KRW 227T), supported by stable memory spot pricing and structural supply tightness from conservative Capex, despite short-term geopolitical share price corrections. This perspective places primary significance on valuation attractiveness (12M forward P/E 5.4x, P/B 1.8x) resulting from steady earnings forecasts and tight memory fundamentals, rather than macro-driven panic selling or minor freight cost exposure in home appliances.
To verify whether this investment thesis continues to materialize, key verification points include whether DRAM spot and contract pricing stability holds amid geopolitical developments, whether 1Q (KRW 37.4T) and full-year (KRW 227T) operating profit projections are realized, and whether conservative industry Capex alongside demand growth sustains a tight memory supply environment. These factors can be monitored through upcoming quarterly earnings releases, official IR presentations, regulatory filings, and periodic financial reports.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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