"Samsung Electronics' Performance Improves"... Samsung Group Stock Funds Attracting Money

Inflow of 69.6 Billion Won into 24 Funds... Stock Price Forecasts Also Revised Upward One After Another

[Asia Economy Reporter Song Hwajeong] As expectations for Samsung Electronics' performance improvement grow this year, funds are pouring into Samsung Group stock funds.

According to financial information provider FnGuide on the 8th, 69.6 billion KRW flowed into 24 Samsung Group stock funds with assets under management of over 1 billion KRW each in the past week. Despite a return of -1.6% during the same period, funds continued to flow in steadily.

This inflow of funds is interpreted as being driven by expectations that Samsung Electronics' performance, which was sluggish last year, will improve this year. Samsung Group stock funds have an allocation of around 20% in Samsung Electronics, the largest among group stocks.

On the same day, Samsung Electronics raised expectations for performance improvement by announcing preliminary results for the fourth quarter of last year that were more robust than expected. Samsung Electronics announced preliminary consolidated sales of 59 trillion KRW and operating profit of 7.1 trillion KRW for the fourth quarter of last year. Although these figures represent decreases of 0.46% and 34.26% respectively compared to the same period last year, the operating profit exceeded market expectations (6.5 trillion KRW).

Last year's annual sales decreased by 5.85% to 229.5 trillion KRW, and operating profit fell by 52.9% to 27.7 trillion KRW, showing sluggish performance, so a clear improvement is expected this year. Song Myeongseop, a researcher at Hi Investment & Securities, said, "Although the first quarter performance this year is uncertain due to weakness in the display (DP) sector, profits in the semiconductor sector will begin to increase from the first quarter, leading to overall performance improvement for Samsung Electronics this year." He added, "Samsung Electronics' sales and operating profit this year are expected to increase by 13% and 53% year-on-year to 260.4 trillion KRW and 41.1 trillion KRW, respectively."

The stock price is also expected to show strength with the performance improvement. Samsung Electronics reached an intraday high of 57,300 KRW on the 19th of last month, marking a 52-week high and approaching the all-time high of 57,520 KRW set on November 2, 2017. Securities firms are also raising their target prices for Samsung Electronics. Eugene Investment & Securities raised Samsung Electronics' target price by 5% to 65,000 KRW, Hi Investment & Securities increased it from 60,000 KRW to 70,000 KRW, and Korea Investment & Securities raised it by 13% to 68,500 KRW. Yoo Jongwoo, a researcher at Korea Investment & Securities, analyzed, "Like semiconductor companies worldwide, Samsung Electronics' stock price has already reflected much of the expectations for performance improvement this year. However, since significant performance improvement is expected next year as well, there is still room for the stock price to rise."

This content was produced with the assistance of AI translation services.