Brokerage : Eugene Investment & Securities
Analyst : Seungwoo Lee
Investment Rating : STRONG BUY (Maintained)
Target Price : KRW 560,000 (Maintained)
Core Momentum : Strong memory outperformance and structural earnings sustainability driven by proactive HBM4 ramp-up and large-scale rolling long-term agreements (LTA)
📊 1. [Valuation & Key Financial Metrics]
- Trading & Valuation Metrics
- Current Price (as of 2026-07-30): KRW 207,000
- Target Price: KRW 560,000 (Maintained)
- Investment Rating: STRONG BUY (Maintained)
- Market Capitalization: KRW 1,210.18 Trillion
- 2026E PER / PBR / EV/EBITDA: 3.6x / 1.9x / 2.3x
- 2027E PER / PBR / EV/EBITDA: 2.2x / 1.1x / 0.9x
- 2026E ROE / 2027E ROE: 57.5% / 57.1%
- 2026E Dividend Yield: 6.3%
- Annual Financial Outlook
- 2025A: Revenue KRW 333.61T, Operating Profit KRW 43.60T, Net Profit KRW 45.21T
- 2026E: Revenue KRW 711.34T, Operating Profit KRW 382.96T, Net Profit KRW 344.07T
- 2027E: Revenue KRW 1,006.74T, Operating Profit KRW 638.84T, Net Profit KRW 576.66T
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review
- 2Q26 consolidated revenue reached KRW 171.5 Trillion (+28% QoQ), with operating profit reaching KRW 89.5 Trillion (+57% QoQ).
- Operating profit by division: DS KRW 89.2T (DRAM KRW 68.4T, NAND KRW 23.4T, Foundry/LSI est. KRW -2.6T), MX/NW KRW -0.7T, SDC KRW 0.7T, and Harman KRW 0.4T.
- Preemptive HBM4 ramp-up and superior memory pricing power drove DS outperformance, offsetting component cost pressures in non-memory and consumer electronics segments.
- Division-Specific Outlook & Catalysts
- Foundry/LSI: Continued operating losses in 2Q26, but the turnaround timing is nearing. Winning 2nm projects, turnkey capabilities (HBM, 2nm logic, advanced packaging), and securing major clients remain key variables.
- MX: Shifted to an operating loss due to component cost inflation and marketing spend, but market share is expected to expand against Android peers via procurement advantages and premium mix.
- Memory (DRAM/NAND): 3Q26 operating profit is projected at KRW 112.8 Trillion (+26% QoQ), supported by robust pricing dynamics and supply constraints. A 5-year rolling LTA structure provides enhanced cycle visibility and long-term earnings sustainability.
- Shareholder Return Review & Flow Dynamics
- While concrete shareholder return actions are not yet finalized, an early rollout is currently under review, and anticipated treasury share purchases for employee performance compensation are expected to stabilize market supply-demand dynamics.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics primarily through the lens of a high-value memory supplier capable of locking in long-term earnings visibility via proactive HBM4 deployment and multi-year rolling LTAs, which significantly outweighs temporary cost headwinds in consumer and set divisions. This perspective places greater emphasis on structural contract stability and pricing dominance over short-term cyclical volatility.
To evaluate whether this investment thesis unfolds as projected, key tracking points include quarterly DRAM and NAND ASP trajectory, mix expansion of premium HBM4 products, commercial order wins and turnaround timing for the 2nm Foundry business, and concrete progress regarding the early review of shareholder return policies as well as treasury share purchases. These developments can be verified through upcoming quarterly earnings releases, official IR presentations, and regulatory filings (DART).
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