[Click eStock] "Samsung Electronics Expected to Significantly Improve Performance in Second Half"

Shinhan Financial Investment "Samsung Electronics Target Price Maintained at 105,000 Won"

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[Asia Economy Reporter Gong Byung-sun] Samsung Electronics is expected to see a significant improvement in its second-half performance in line with the memory semiconductor upcycle. The shortage of non-memory supply is also expected to be resolved. Shinhan Financial Investment maintained a target price of 105,000 KRW and a 'Buy' rating on Samsung Electronics.

According to Shinhan Financial Investment on the 4th, Samsung Electronics' sales in the second quarter of this year are expected to record 62 trillion KRW, down 5.1% from the previous quarter. Operating profit is expected to increase by 20.6% to 11.3 trillion KRW. This figure significantly exceeds the market consensus of 10.3 trillion KRW. Prices of dynamic RAM (DRAM) and NAND are rising, and shipments of non-memory products are recovering due to the restart of the Austin fab. The continued strong demand for sets is also a positive factor.

Second-half performance is expected to improve significantly compared to the first half. Choi Do-yeon, a researcher at Shinhan Financial Investment, said, "A price increase effect due to the memory semiconductor upcycle is expected," adding, "The price increase will exceed market expectations."

The shortage of non-memory supply, which negatively affected IT demand in the first half, is expected to ease from the end of this year. Fabs that were shut down, such as Samsung Electronics' Austin fab, are now operating normally. Strong server demand from the second quarter of this year is also a positive factor. Researcher Choi explained, "It will add momentum to smartphones and PCs, which have driven existing demand."

Shinhan Financial Investment also forecasted a significant increase in Samsung Electronics' performance this year. Researcher Choi said, "Samsung Electronics' sales this year are expected to reach 268 trillion KRW, a 13.2% increase from the previous year," and "Operating profit is expected to increase by 39.5% to 50.2 trillion KRW." In particular, Shinhan Financial Investment expects the semiconductor division's operating profit to increase by 58.2% to 29.8 trillion KRW.

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