Brokerage : Hanwha Investment & Securities
Analyst : Junyoung Park (RA Nau Kim)
Investment Rating : BUY (Maintained)
Target Price : KRW 330,000 (Upgraded)
Core Momentum : Comprehensive earnings and cash flow expansion driven by intensifying structural memory shortages through 2027 and surging customer demand for Long-Term Agreements (LTAs).
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY maintained; Target Price raised to KRW 330,000 (49.7% upside potential based on April 30, 2026 closing price of KRW 220,500)
- Valuation Methodology: Target Price derived by applying a Target P/B multiple of 3.0x (a 30% discount to Micron’s 26F P/B) to 2026F BPS of KRW 110,320
- Key Financial Metrics & Forecasts (2024 ~ 2027E):
- 2024: Revenue KRW 300.87T, OP KRW 32.73T, EBITDA KRW 75.36T, Net Profit (Controlling) KRW 33.62T, EPS KRW 5,433, Net Debt -KRW 93.29T, PER 40.6x, PBR 3.8x, EV/EBITDA 17.6x, ROE 9.0%, Div. Yield 0.7%
- 2025: Revenue KRW 333.61T, OP KRW 43.60T, EBITDA KRW 90.53T, Net Profit (Controlling) KRW 44.26T, EPS KRW 7,250, Net Debt -KRW 100.58T, PER 30.4x, PBR 3.5x, EV/EBITDA 14.5x, ROE 10.8%, Div. Yield 0.8%
- 2026E: Revenue KRW 673.42T, OP KRW 359.55T, EBITDA KRW 412.96T, Net Profit (Controlling) KRW 329.87T, EPS KRW 56,372, Net Debt -KRW 347.62T, PER 3.9x, PBR 2.0x, EV/EBITDA 2.6x, ROE 56.5%, Div. Yield 0.8%
- 2027E: Revenue KRW 862.77T, OP KRW 536.66T, EBITDA KRW 596.63T, Net Profit (Controlling) KRW 416.29T, EPS KRW 71,201, Net Debt -KRW 628.28T, PER 3.1x, PBR 1.3x, EV/EBITDA 1.3x, ROE 44.0%, Div. Yield 0.8%
🚀 2. [Market Opportunities & Business Outlook]
- Structural Supply Tightness & Customer LTA Influx:
- Supply-demand conditions projected to be tighter in 2027 than in 2026, based on company guidance
- Influx of long-term supply agreement (LTA) requests from global clients seeking supply security
- Increased LTA coverage is expected to cushion earnings drawdowns even in a potential 2028 down-cycle, solidifying structural sustainability
- 1Q26 Financial Review:
- Revenue KRW 133.9T and Operating Profit KRW 57.2T, achieving record quarterly results
- Revenue by Division: DS KRW 81.7T (Memory KRW 74.8T, S.LSI/Foundry KRW 6.9T), SDC KRW 6.7T, MX/NW KRW 38.1T, VD/DA KRW 14.3T, Harman KRW 3.8T
- Operating Profit by Division: DS KRW 53.7T (OPM 66%, representing nearly 94% of total OP), SDC KRW 0.4T, MX/NW KRW 2.8T, VD/DA KRW 0.2T, Harman KRW 0.2T
- 2Q26 Financial Outlook:
- Revenue KRW 163.5T and Operating Profit KRW 86.3T projected, marking consecutive quarterly records
- DRAM and NAND expected to generate KRW 84.7T in operating profit (~98% of total OP)
- DRAM: ASP QoQ +38%, B/G QoQ +5%
- NAND: ASP QoQ +35%, B/G QoQ +1%
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics not merely as a beneficiary of cyclical spot price surges, but as a critical infrastructure supplier locking in both earnings magnitude and downside protection via expanding Long-Term Agreements (LTAs) amidst an intensifying supply deficit through 2027. This perspective prioritizes structural business model improvements—where long-term contract structures mitigate volatility during subsequent industry downturns—over short-term quarterly beats.
To determine whether this investment thesis unfolds as anticipated, key verification checkpoints include the formalization and contract terms of client LTAs amid persistent supply tightness into 2027, the sequential realization of double-digit ASP gains in DRAM and NAND for 2Q26 and beyond, and profitability resilience in non-memory and consumer set divisions as DS dominates company-wide earnings. These milestones can be monitored via upcoming quarterly earnings disclosures, official IR materials, and regulatory filings on DART/KRX.
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