[Click eStock] Samsung Electronics, Stock Price Drops on Earnings Announcement Day... What Lies Ahead?

[Asia Economy Reporter Ji Yeon-jin] Samsung Electronics' stock price fell on the earnings announcement day on the 29th, and it is expected that the stock price will remain flat going forward.

Hana Financial Investment stated on the 29th, "U.S. Secretary of Commerce nominee Gina Raimondo expressed a tough stance on China, causing the stock prices of companies with a high sales ratio to China in the Philadelphia Semiconductor Index to decline," adding, "Due to concerns over the rekindling of the U.S.-China trade dispute, it is believed that the stock prices of Samsung Electronics and SK Hynix were also negatively affected." Samsung Electronics' stock price fell 2.24% the previous day, and SK Hynix dropped 4.28%.

Samsung Electronics develops and supplies DRAM, a memory semiconductor, and it is judged that if DRAM product prices do not surge or plunge sharply as they did from 2016 to 2018, the performance and stock prices of DRAM suppliers will be positive. Considering that Texas Instruments, the leading supplier of analog semiconductors, recorded stock returns of 28% over 1 year, 221% over 5 years, and 370% over 10 years, it is expected that Samsung Electronics' stock price will move similarly to Texas Instruments in an environment where DRAM market fluctuations are not significant and memory demand grows in the mid to long term.

Financial investment analyst Kim Kyung-min said, "(Samsung Electronics) is expected to have a flat stock price until the next earnings announcement," adding, "The rekindling of the U.S.-China trade dispute is a psychological burden, and at least in the non-memory semiconductor sector, global competitors have faced obstacles to stock prices due to restrictions on increases in product P (price), Q (quantity), and C (cost). This is because it is difficult to easily resolve the shortage of parts supply in the global non-memory supply chain, such as automotive semiconductors."

Samsung Electronics' operating profit for the first quarter of this year is expected to be 8.3 trillion KRW, the lowest among quarterly earnings this year. In addition, Samsung Electronics, which has manufacturing facilities amid parts supply shortages, is expected to be relatively advantageous. Analyst Kim explained, "For Samsung Electronics' stock price to rebound, either the Q increase restriction in the non-memory semiconductor sector needs to be resolved, or a signal that P is rising faster than that is necessary."

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