[Click eStock] "Samsung Electronics, Strong Performance Expected in Q3"

KB Securities Issues 'Buy' Rating and 80,000 KRW Target Price... Closing Price on 23rd is 58,600 KRW.

[Asia Economy Reporter Kum Boryeong] As Samsung Electronics' third-quarter earnings are expected to increase compared to the previous year, KB Securities has issued a 'Buy' investment opinion on Samsung Electronics with a target price of 80,000 KRW. The closing price on the 23rd was 58,600 KRW.

According to KB Securities on the 24th, Samsung Electronics' third-quarter operating profit is estimated at 11.1 trillion KRW. This represents a 43% increase compared to the previous year and a 36% increase from the previous quarter. By division, semiconductor is 5.4 trillion KRW, IM (IT & Mobile) 4.2 trillion KRW, and CE (Consumer Electronics) 1.1 trillion KRW. Dongwon Kim, a researcher at KB Securities, explained, "This is expected to be the highest operating profit in two years since the third quarter of 2018 (17.5 trillion KRW). This is because the IT & Mobile (IM) and Consumer Electronics (CE) divisions are expected to achieve their highest operating profits in four years since the second quarter of 2016 due to increased shipments and expanded online sales ratio, and the semiconductor operating profit in the third quarter is expected to be similar to the previous quarter despite price declines due to improved cost structure."

DRAM prices are expected to bottom out in the fourth quarter. Researcher Kim analyzed, "In the fourth quarter, North American data center companies are expected to resume server DRAM orders after six months, and due to the competition among global smartphone companies to expand market share following Huawei sanctions, mobile DRAM demand in the fourth quarter is estimated to exceed previous forecasts by 20%, so DRAM prices are expected to form a bottom starting in the fourth quarter."

KB Securities forecasts Samsung Electronics' average quarterly profit next year to be 11 trillion KRW. Researcher Kim said, "Samsung Electronics' stock price has only risen 6% compared to the beginning of the year due to concerns about performance deterioration caused by semiconductor price declines and overhang issues from the revision of the Insurance Business Act. However, Samsung Electronics is expected to generate an average operating profit of 11 trillion KRW per quarter next year, showing a performance strength different from the past."

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