[Click eStock] "Samsung Electronics, a Phase of Uncertainty Resolution"

[Asia Economy Reporter Song Hwajeong] Shinhan Financial Investment maintained a 'Buy' rating and a target price of 120,000 KRW on Samsung Electronics on the 19th, viewing it as a period to focus on the memory semiconductor turnaround amid uncertainty resolution.

Shinhan Financial Investment forecasted that Samsung Electronics would record Q1 sales of 61.7 trillion KRW, a 0.2% increase from the previous quarter, and an operating profit of 8.96 trillion KRW, a 1.0% decrease, surpassing the consensus (operating profit of 8.58 trillion KRW). Choi Doyeon, a researcher at Shinhan Financial Investment, explained, "Semiconductor performance will slightly decline due to initial costs of new fabs and the suspension of the Austin fab. However, the IM (IT & Mobile) division's performance will significantly improve as smartphone shipments exceed expectations due to the Galaxy S21 launch effect."

A significant performance improvement is expected through next year. Shinhan Financial Investment projected Samsung Electronics' annual sales and operating profit for this year to be 267.6 trillion KRW and 47 trillion KRW, respectively, representing increases of 13% and 30.7% compared to the previous year. For 2022, sales are expected to increase by 11.8% to 299.3 trillion KRW, and operating profit by 33.6% to 62.8 trillion KRW, marking an all-time high. Researcher Choi stated, "Memory semiconductors will lead future performance improvements."

The opinion is that it is time to focus on the memory semiconductor turnaround as uncertainties are resolved. Researcher Choi noted, "The recent sluggish stock price was due to concerns such as the suspension of the Austin fab's operation. Currently, the Austin fab has partially resumed operations and is understood to be approaching full operation, with the estimated performance decline effect limited to 300 to 400 billion KRW."

The recent stock price adjustment period is analyzed as a phenomenon occurring during the transition from valuation-driven price increases to performance-driven increases. Researcher Choi added, "The DRAM price surge and NAND turnaround indicate that the memory semiconductor market will improve very rapidly. It is time to focus on the memory semiconductor turnaround."

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