[Click eStock] "Despite Uncertainty at US Texas Plant... Samsung Electronics 1Q Operating Profit Expected at 9 Trillion Won"

From TVs and Smartphones to Data Centers... Surging Demand in Both B2C and B2B
Uncertainties Expected to Ease Starting Q2

Kim Ki-nam, Vice Chairman and CEO of Samsung Electronics, is speaking at the 52nd Samsung Electronics Annual General Meeting held on the 17th at the Suwon Convention Center in Suwon, Gyeonggi Province. Photo by Kim Hyun-min, Suwon kimhyun81@

[Asia Economy Reporter Minwoo Lee] Despite uncertainties such as the suspension of operations at the U.S. factory, Samsung Electronics is expected to post first-quarter earnings that exceed market consensus.

On the 23rd, KB Securities forecast that Samsung Electronics will record sales of 61.7 trillion KRW and an operating profit of 9.1 trillion KRW in the first quarter of this year. This represents an increase of 11.6% and 41.5%, respectively, compared to the same period last year. The operating profit is expected to surpass the consensus estimate of 8.6 trillion KRW by about 500 billion KRW. Despite losses from the suspension of operations at the Texas Austin factory and increased costs related to the initial semiconductor production line, performance exceeding market expectations is anticipated.

Dongwon Kim, a researcher at KB Securities, explained, "Although there is a decline in earnings in semiconductors and displays (DP), operating profits in smartphones (IM) and home appliances (CE) are expected to increase by +55% and +100%, respectively, compared to the same period last year." He added, "In particular, the improvement in CE performance is expected to continue into the second quarter as replacement demand for PCs, TVs, and home appliances coincides."

Strong performance is also expected in the second quarter. Uncertainty is expected to ease with the normalization of the Texas Austin factory, and demand in the global semiconductor market is anticipated to increase. Researcher Kim stated, "The global semiconductor market is experiencing strong final demand from consumer products such as PCs, TVs, and mobiles, as well as data centers and original equipment manufacturer (OEM) orders, along with inventory accumulation demand. Therefore, demand is expected to exceed supply in the second half of this year." He explained, "As a result, the supply shortage of DRAM will lead to an expanded increase in average selling price (ASP) from the second quarter, and the timing of NAND price rebound is expected to be brought forward from the second half to the second quarter."

Due to these circumstances, KB Securities estimated that Samsung Electronics will record an operating profit of 48.9 trillion KRW this year. This represents a 36% increase compared to last year and is expected to be the highest performance in three years since 2018. The semiconductor division's operating profit alone is projected to increase by 49% to 28 trillion KRW compared to the previous year. Accordingly, the investment opinion of "Buy" and the target stock price of 105,000 KRW were maintained. The closing price on the previous day was 82,000 KRW.

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