Brokerage : Eugene Investment & Securities (Analyst: Seungwoo Lee)
Investment Rating : STRONG BUY (Maintained)
Target Price : KRW 560,000 (Maintained)
Core Momentum : Continued upward revisions in earnings forecasts through 2027 driven by strong pricing power and tightening commodity DRAM and NAND supply
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: STRONG BUY maintained, Target Price maintained at KRW 560,000 (Current price KRW 296,000 as of report date)
- Earnings Forecast Summary:
- 2025A: Revenue KRW 333.6T, Operating Profit KRW 43.6T, Net Profit KRW 45.2T
- 2026E: Revenue KRW 722.6T, Operating Profit KRW 391.0T (revised up from KRW 361.3T), Net Profit KRW 351.3T
- 2027E: Revenue KRW 1,006.2T, Operating Profit KRW 643.3T (revised up from KRW 589.4T), Net Profit KRW 580.6T
- Valuation Multiples & Financial Indicators:
- PER: 2025A 16.0x → 2026E 5.1x → 2027E 3.1x
- PBR: 2025A 1.9x → 2026E 2.6x → 2027E 1.6x
- ROE: 2025A 10.8% → 2026E 58.4% → 2027E 57.0%
- EV/EBITDA: 2025A 7.5x → 2026E 3.5x → 2027E 1.7x
- Dividend Yield (2026E): 4.4%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Preliminary Earnings Estimates:
- Consolidated Revenue estimated at KRW 171.0T (+28% QoQ), Operating Profit estimated at KRW 89.4T (+56% QoQ)
- Segment Operating Profit Estimates: DS KRW 89.6T (DRAM KRW 71.0T, NAND KRW 21.3T, Foundry/LSI KRW -2.8T), SDC KRW 0.4T, Harman KRW 0.3T, MX/NW KRW -1.0T
- Business Segment Details:
- Memory (DS): Total memory operating profit (KRW 92.4T) is estimated to significantly exceed the previous estimate (KRW 83.1T), with blended ASP outperformance expected to continue through 2027 backed by aggressive pricing negotiations and industry-leading capacity.
- Non-Memory & Set Divisions: MX division faced an operating deficit (KRW -1.0T) due to off-seasonality and surging memory component costs, while Foundry/LSI profitability turnaround was delayed (KRW -2.8T) due to incentive bonus provisions.
- Industry Catalysts & Outlook:
- Supply-Demand Dynamic: Deepening memory shortage anticipated for 2027 is lifting short-term contract price outcomes and raising blended ASP forecasts through 2027, with 2H26 commodity memory and 2027 HBM pricing expected to beat expectations.
- AI CapEx & Global Competition: Major tech firms such as Meta continue frontier model development and are expected to reaffirm strong AI CapEx commitment in 2Q26 earnings calls; Chinese DRAM market share expansion is expected to be delayed beyond 2029 due to equipment export controls.
- Share Price Drivers: Structural earnings durability via Long-Term Agreements (LTAs) and enhanced shareholder returns are expected to help overcome recurrent share price corrections following cyclical earnings peaks.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a company leveraging its industry-leading capacity to support strong pricing power and earnings growth amid a deepening memory shortage, which outweighs temporary margin drag in MX and Foundry. This perspective places primary importance on the long-term sustainability of earnings supported by persistent frontier model competition among key tech firms and muted competitive risks, rather than short-term quarterly surprises.
To verify whether this investment thesis continues to materialize, key tracking points include the actual pricing outcomes for 2H26 commodity DRAM/NAND and 2027 HBM, and the formalization of LTAs alongside shareholder return execution to secure forward earnings durability. These developments can be confirmed through upcoming quarterly earnings releases, periodic financial reports, and official IR materials.
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