Brokerage : Shinhan Securities (Analyst: Hyoungtae Kim, Hyesu Song)
Investment Rating : Buy (Maintained)
Target Price : KRW 590,000 (Upgraded)
Core Momentum : Multi-year earnings expansion expected to continue driven by persistent memory supply shortages, upward revisions to 2027 earnings forecasts, and expectations for FCF-based shareholder returns
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Buy maintained, Target Price upgraded by 7% to KRW 590,000 (applied 4.5x target PBR, based on DRAM peer group average, to 12M forward BPS of KRW 131,556; current price KRW 323,000 as of 2026.06.29, upside potential 82.7%)
- Earnings Forecast Summary:
- 2024A: Revenue KRW 300.9T, Operating Profit KRW 32.7T, Controlling Net Profit KRW 33.6T
- 2025A: Revenue KRW 333.6T, Operating Profit KRW 43.6T, Controlling Net Profit KRW 44.3T
- 2026F: Revenue KRW 735.2T, Operating Profit KRW 378.6T (revised up +3%), Controlling Net Profit KRW 292.8T
- 2027F: Revenue KRW 980.0T, Operating Profit KRW 580.0T (revised up +18% from KRW 491T), Controlling Net Profit KRW 443.6T
- 2028F: Revenue KRW 1,131.7T, Operating Profit KRW 660.7T, Controlling Net Profit KRW 502.6T
- Valuation Multiples & Financial Indicators:
- PER: 2025A 18.8x → 2026F 7.4x → 2027F 5.0x → 2028F 4.4x
- PBR: 2025A 1.9x → 2026F 3.0x → 2027F 2.0x → 2028F 1.5x
- ROE: 2025A 10.8% → 2026F 51.7% → 2027F 50.5% → 2028F 40.5%
- EV/EBITDA: 2025A 7.7x → 2026F 4.1x → 2027F 2.4x → 2028F 1.7x
- Dividend Yield (DY): 2025A 1.4% → 2026F 0.5% → 2027F 5.3% → 2028F 5.9%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Preview:
- Consolidated revenue projected at KRW 174.2T (+30% QoQ) and operating profit at KRW 82.1T (+44% QoQ).
- While 2Q26 operating profit was adjusted down by 9% due to incentive bonus provisions estimated in the high KRW 10T range, normalized operating profit excluding provisions is estimated to have exceeded KRW 100T (>10% above prior estimates).
- Segment Operating Profit Estimates: Semiconductor KRW 80.8T (DRAM KRW 62T, NAND KRW 20.7T, Non-Memory -KRW 1.9T), Mobile KRW 0.5T, Display KRW 0.4T, Harman KRW 0.3T, Home Appliances KRW 0.1T.
- 2Q26 Price & Shipment Estimates: DRAM ASP +45%, bit growth +5%; NAND ASP +65%, bit growth +2%.
- Medium-to-Long-Term Business Drivers:
- Memory Earnings Contribution: While set cost burdens persist, memory’s contribution to total company operating profit is expected to reach 98%, driving corporate performance.
- HBM & High-Value Products: Potential re-rating of 2H26–2027 HBM competitiveness and rising HBM ASPs support further profitability improvements; DRAM cycle peak is expected to extend, alongside expanding high-value NAND product mix.
- Supply-Demand Dynamic: Despite pulled-forward CapEx schedules, supply shortage resolution remains limited through 2028; multiple price negotiations for LTAs are underway backed by resilient server memory demand.
- Shareholder Return Drivers: Expectations for shareholder return policies backed by FCF approaching KRW 250T serve as an additional catalyst.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a company entering an accelerated earnings growth path led by its memory division amid persistent structural supply shortages and rising prices, which outweigh temporary bonus provisions and set division margin compression. This perspective places greater significance on the extended memory price upcycle, the anticipated re-rating of HBM competitiveness in 2H26–2027, and substantial FCF generation for shareholder return potential, rather than short-term cost headwinds.
To verify whether this investment thesis continues to materialize, key tracking points include the sustainability of commodity DRAM and NAND price increases in the second half, the progress of HBM competitiveness re-rating and ASP gains into 2027, the outcome of ongoing LTA pricing negotiations for server memory, and the formalization of shareholder return plans supported by FCF. These developments can be confirmed through upcoming quarterly earnings releases, periodic financial reports, and official company IR disclosures.
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