Brokerage : Shinhan Securities
Analyst : Hyungtae Kim, Hyesus Song
Investment Rating : BUY (Maintained)
Target Price : KRW 550,000 (Upgraded)
Core Momentum : Sustained operational leverage expected through 2027 driven by structural supply shortages and accelerating 2H shipments of premium applications including HBM4 and SOCAMM2.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY maintained; Target Price raised by +83.3% to KRW 550,000 (99.3% upside potential based on May 20, 2026 closing price of KRW 276,000)
- Valuation Methodology: Target Price derived by applying a target PBR multiple of 4.0x (DRAM peer group average) to the 12MF BPS of KRW 138,989
- Valuation Re-rating Factors: Additional memory price increases, earnings visibility secured via long-term contracts, enhanced shareholder returns (share buyback/cancellation, dividends), and resolution of labor-related uncertainties
- Key Financial Metrics & Forecasts (2024 ~ 2028F):
- 2024: Revenue KRW 300.87T, OP KRW 32.73T, Net Profit (Controlling) KRW 33.62T, PER 11.1x, ROE 9.0%, PBR 0.9x, EV/EBITDA 3.6x, DY 2.7%
- 2025: Revenue KRW 333.61T, OP KRW 43.60T, Net Profit (Controlling) KRW 44.26T, PER 18.8x, ROE 10.8%, PBR 1.9x, EV/EBITDA 7.7x, DY 1.4%
- 2026F: Revenue KRW 707.99T (+112.2% YoY), OP KRW 367.12T (+743.0% YoY), Net Profit (Controlling) KRW 284.11T, PER 6.5x, ROE 50.6%, PBR 2.6x, EV/EBITDA 3.5x, DY 0.6%
- 2027F: Revenue KRW 870.22T, OP KRW 490.59T, Net Profit (Controlling) KRW 374.99T, PER 5.0x, ROE 44.2%, PBR 1.8x, EV/EBITDA 2.3x, DY 4.7%
- 2028F: Revenue KRW 938.18T, OP KRW 495.38T, Net Profit (Controlling) KRW 375.25T, PER 5.0x, ROE 32.8%, PBR 1.4x, EV/EBITDA 2.0x, DY 5.1%
🚀 2. [Market Opportunities & Business Outlook]
- Prolonged Memory Supply-Demand Imbalance & Pricing Strength:
- Structural undersupply environment projected to persist through at least 2027 despite advancing CapEx timelines
- NAND pricing carries additional upside potential due to deprioritized capacity expansion plans
- 2026F full-year assumptions: DRAM ASP +273%, B/G +21.5% / NAND ASP +292%, B/G +12%
- 2H Earnings Acceleration & Divisional Forecasts:
- 2H revenue and operating profit projected to grow +28.3% and +49.6% HoH, respectively (+52% HoH in semiconductor operating profit)
- Commencing volume shipments of high-value applications including HBM4 and SOCAMM2, alongside mobile product launches and server processor segmentation
- 2026F Operating Profit by Division: Semiconductor KRW 356.7T (DRAM KRW 269.6T, NAND KRW 91.7T, Non-memory -KRW 4.5T), Mobile KRW 4.9T, Display KRW 4.2T, Harman KRW 1.1T, Consumer Electronics KRW 0.1T
- Foundry & Set Division Turnaround:
- Foundry segment expects yield improvements and new order expansion starting in 2H
- Set division anticipates profitability recovery once content revenues materialize post-market share expansion
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electronics as a market leader capturing peak operating leverage from an extended structural memory shortage, driven by favorable product mix shifts toward premium memory. This perspective frames short-term share price consolidation as a timing opportunity within a structural upcycle, prioritizing valuation re-rating supported by long-term supply agreements and strengthened shareholder return programs.
To determine whether this investment thesis unfolds as anticipated, key verification checkpoints include the sustained growth in DRAM and NAND ASP and shipment volumes amid undersupply conditions through 2027, the timely execution of commercial shipments for HBM4 and SOCAMM2 alongside 2H foundry yield improvements, and the tangible execution of enhanced shareholder returns such as share cancellations and dividend payouts. These indicators can be tracked via subsequent quarterly earnings releases, official IR presentations, and regulatory filings on DART/KRX.
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