[Click eStock] Samsung SDS Aims for a 'Quantum Jump' in Earnings by Securing Its 'Home Turf'

Operating Profit of 990 Billion KRW Last Year... Approaching the '1 Trillion Club'
Most Growth from External Sales... Significant Growth Possible with Increased Affiliate Investments

Hong Won-pyo, CEO of Samsung SDS

[Asia Economy Reporter Minwoo Lee] Samsung SDS's operating profit last year rose 14% year-on-year to 990.1 billion KRW. Most of this growth occurred in the external business division. If affiliates such as Samsung Electronics resume investments related to the 4th Industrial Revolution, such as factory automation, domestic growth is also possible, leading to expectations of even better performance this year.

On the 31st, Yuanta Securities forecast that Samsung SDS will achieve sales of 11.7077 trillion KRW and operating profit of 1.132 trillion KRW this year, representing increases of 9.2% and 14.3%, respectively, compared to last year. It is expected to maintain the growth trend shown last year. Previously, Samsung SDS recorded sales of 10.7196 trillion KRW and operating profit of 990.1 billion KRW last year, marking a 7% increase in sales and 13% growth in operating profit compared to the previous year. The operating profit is on the verge of surpassing 1 trillion KRW for the first time.

Last year's strong performance was mainly driven by growth in external business. Annual sales in the external business division reached 1.8 trillion KRW, a 31% increase from the previous year. In particular, the four major IT strategic businesses?Intelligent Factory, Cloud, AI & Analytics, and Solutions?accounted for more than 30% of total IT service sales for the second consecutive year. This growth in the external business division is expected to continue this year. Changyoung Lee, a researcher at Yuanta Securities, stated, "Having accumulated SI experience in various fields such as public sector, finance, manufacturing, and overseas, external sales this year are expected to grow by more than 50% compared to last year."

Growth in the domestic business is also anticipated. Last year, the domestic affiliate sales growth rate was only 3%, as investments in the SI sector by affiliates such as Samsung Electronics have not yet fully commenced. The researcher predicted, "If they resume investments related to the 4th Industrial Revolution, such as factory automation, Samsung SDS's domestic sales could grow significantly."

Meanwhile, Yuanta Securities maintained a 'Buy' investment rating and a target price of 270,000 KRW for Samsung SDS. The closing price the previous day was 201,000 KRW.

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