"Samsung Electronics' 'Surprise Performance': Why Stock Price Lags Despite Semiconductor Success"

[Asia Economy Reporter Suyeon Woo] Samsung Electronics achieved an 'earnings surprise' by posting an operating profit exceeding 12 trillion won in the second quarter alone, thanks to strong semiconductor performance. However, the stock price has been on a downward trend since the earnings announcement. Experts emphasize that for Samsung Electronics' earnings to be reflected in the stock price, there must be confidence in the improvement of the memory semiconductor market conditions for more than the next six months, rather than just the past quarter's results.

According to the industry on the 10th, Samsung Electronics' stock price closed lower for three consecutive days since the second quarter earnings were announced on the 7th. As of the closing price on the 9th, Samsung Electronics' stock price closed at 79,400 won, down 2.2% compared to before the earnings announcement (6th, 81,200 won).

Samsung Electronics stock price over the past 3 months / Data from Naver Finance

In the second quarter of this year, Samsung Electronics recorded the highest sales ever for a second quarter. Sales increased by 18.94% to 63 trillion won, and operating profit surged by 53.37% to 12.5 trillion won. The market had expected second-quarter operating profit to be around 11 trillion won, so this was a surprise performance far exceeding expectations.

The U.S. Austin foundry plant, which experienced a shutdown in the first quarter, fully normalized from the second quarter, and the price of the main memory semiconductor, DRAM, rose by more than 26% in the second quarter alone. Additionally, the one-time reversal of provisions in the display division contributed to the improved performance. The consumer electronics division also performed well, supported by ongoing pent-up demand due to COVID-19.

However, the market's reaction after the earnings announcement was lukewarm. On the day of the announcement, the 7th, Samsung Electronics' stock price closed at 80,800 won, but by the 9th, it had fallen to the 79,000 won range. Experts analyze that concerns over a slowdown in demand for server DRAM in the second half of the year influenced the semiconductor sector's stock price decline. Doubts are emerging that demand for server DRAM, which was expected to lead the memory semiconductor market after the second quarter, may weaken more than initially anticipated starting in the second half.

Kim Kyung-min, a researcher at Hana Financial Investment, said, "News that the U.S. Department of Defense canceled a cloud business contract with Microsoft led to a deterioration in investment sentiment in the server sector," adding, "From Samsung Electronics' perspective, such news emerging in the demand-side upstream industry has burdened the stock price."

Park Yoo-ak, a researcher at Kiwoom Securities, said, "Rising inventory levels of server DRAM among North American hyperscalers and concerns about a slowdown in the DRAM market are causing a period of adjustment in Samsung Electronics' stock price," adding, "From the third quarter, North American hyperscaler inventories are expected to start decreasing, and as the year-end approaches, the upward momentum of DRAM prices is expected to strengthen again."

Now, there are also opinions that the market's focus should shift from earnings or semiconductor market conditions to announcements of investment strategies such as foundry expansion and large-scale mergers and acquisitions (M&A). Lee Seung-woo, a researcher at Eugene Investment & Securities, said, "Having delivered earnings surprises for nine consecutive quarters, it has now become a routine event," adding, "Rather than immediate earnings, the memory outlook for at least 6 to 12 months ahead is more important." He further added, "Meaningful achievements or strategies in new semiconductor fields such as foundry or M&A need to be presented."

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