Brokerage : Shinhan Securities
Analyst : Hyoungtae Kim (Senior Analyst), Hyesoo Song (Analyst)
Investment Rating : BUY (Maintained)
Target Price : KRW 450,000 (Lowered)
Core Momentum : Shareholder return execution backed by an estimated KRW 250 Trillion in FCF, LTA expansion with five major CSPs, and growth potential from HBM-foundry turnkey solutions
📊 1. [Valuation & Key Financial Metrics]
- Stock & Valuation Indicators
- Current Price (as of 2026-07-30): KRW 207,000 (undervalued at 12M forward PBR of 1.5x)
- Target Price: KRW 450,000 (Lowered, Upside: 117.4%)
- Investment Rating: BUY (Maintained)
- Target Price Methodology: Applied 3.3x (average 12M forward PBR of DRAM peers during historical up-cycle peak, applying a 50% discount to CXMT) to adjust for excessive price-to-target divergence
- Market Capitalization: KRW 1,210.18 Trillion (5,846.3 million shares outstanding)
- 2026(F) Forward P/E: 4.8x, P/B: 2.0x, ROE: 52.0%
- 2027(F) Forward P/E: 3.2x, P/B: 1.3x, ROE: 50.8%
- Key Financial Forecasts (K-IFRS Consolidated)
- 2024: Revenue KRW 300.87 Trillion, Operating Profit KRW 32.73 Trillion, Net Profit (Controlling) KRW 33.62 Trillion, PER 11.1x
- 2025: Revenue KRW 333.61 Trillion, Operating Profit KRW 43.60 Trillion, Net Profit (Controlling) KRW 44.26 Trillion, PER 18.8x
- 2026(F): Revenue KRW 733.11 Trillion, Operating Profit KRW 377.42 Trillion, Net Profit (Controlling) KRW 291.97 Trillion, PER 4.8x
- 2027(F): Revenue KRW 967.52 Trillion, Operating Profit KRW 576.77 Trillion, Net Profit (Controlling) KRW 441.27 Trillion, PER 3.2x
- 2028(F): Revenue KRW 1,059.90 Trillion, Operating Profit KRW 654.81 Trillion, Net Profit (Controlling) KRW 497.78 Trillion, PER 2.9x
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review & Segment Performance
- Consolidated Q2 Revenue reached KRW 171.5 Trillion (+28.1% QoQ), and Operating Profit reached KRW 89.5 Trillion (+56.4% QoQ)
- Operating Profit by Division: Semiconductor KRW 89.2 Trillion (DRAM KRW 67.9 Trillion, NAND KRW 23.5 Trillion, Non-memory -KRW 2.1 Trillion), Display KRW 0.7 Trillion, Harman KRW 0.4 Trillion, Home Appliances -KRW 10.0 Billion, Mobile -KRW 0.7 Trillion
- Memory Pricing & Shipments: DRAM ASP +43.2%, Bit Growth +10% (OPM 78%) / NAND ASP +67.4%, Bit Growth +0.2% (OPM 69%)
- 3Q26 Earnings Outlook
- Forecast Q3 Revenue of KRW 207.8 Trillion (+21.2%) and Operating Profit of KRW 112.1 Trillion (+25.2%)
- Product mix adjustments applied: DRAM price increase revised up by 1%p, NAND revised down by 1%p
- LTA Expansion & Shareholder Return Strategy
- Executed LTAs with five major CSPs for server memory facing supply constraints through 2028, with plans to expand LTA coverage to 60–70% of total Capa
- Growth expectations maintained for integrated HBM and foundry turnkey solutions driven by new client acquisitions
- Re-emerging expectations for share repurchases/cancellations and special dividends supported by estimated 2026 FCF approaching KRW 250 Trillion
📝 Editor’s Comment (Perspective)
The analyst evaluates Samsung Electronics as a business validating robust fundamental strength through clear shareholder return intentions backed by nearly KRW 250 Trillion in estimated FCF and expanding CSP LTAs, despite lowering the target price due to near-term supply-demand frictions. Rather than focusing on these short-term market supply-demand obstacles, this perspective places greater weight on persistent server memory supply shortages through 2028, securing 60–70% of capacity under LTAs, and the potential value of integrated HBM-foundry turnkey solutions.
To verify whether this investment thesis holds going forward, key tracking points include whether concrete shareholder return initiatives such as share buybacks/cancellations and special dividends are executed from 2026 FCF, whether LTA contracts expand to cover 60–70% of total manufacturing capacity beyond the initial five CSPs, and whether new customer wins materialize into commercial orders for HBM and foundry turnkey solutions. These developments can be monitored through upcoming quarterly earnings releases, official IR presentations, and periodic regulatory filings.
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