[Click eStock] "Semiconductor Prices to Rebound Next Year... Samsung Electronics Recommends Low-Price Buying Strategy"

[Asia Economy Reporter Ji Yeon-jin] Yuanta Securities stated on the 20th that regarding Samsung Electronics, it is a time to focus on the foundry business and the popularization expectations of the foldable smartphone market rather than concerns about the decline in memory semiconductor prices. Therefore, they maintain the target stock price at 107,000 KRW and recommend a low-price buying strategy.

Samsung Electronics is expected to record sales of 74 trillion KRW in the fourth quarter of this year, a 20% increase compared to the same period last year, and an operating profit of 15.1 trillion KRW, a 67% increase.

Researcher Lee Jae-yoon of Yuanta Securities said, "Although the operating profit of the memory semiconductor division is expected to decrease by 11.5% quarter-on-quarter to 8.3 trillion KRW, the IM and display divisions are expected to record solid performance," adding, "Considering the foundry price environment, Samsung Electronics' non-memory semiconductor division is expected to achieve the highest quarterly performance ever."

Researcher Lee particularly predicted that memory semiconductor purchases will enter a cycle from the second quarter of next year when the inventories held by customers are depleted, considering seasonal factors. From the third quarter, memory semiconductor prices are expected to rebound, highlighting the performance momentum of the memory sector.

Samsung Electronics' annual operating profit for next year is estimated to reach 55 trillion KRW. This is because the decline in profits of the memory semiconductor division is expected to be limited as memory semiconductor prices rebound in the second half of next year. The performance momentum of the foundry business, which is gaining momentum in the second half, is expected to continue next year, driving the growth of the semiconductor division's operating profit.

Researcher Lee said, "Some are predicting a decline in memory semiconductor prices throughout 2022, fueling stock price drops," but added, "Even assuming memory semiconductor prices decline throughout next year, the company's consolidated operating profit is estimated to reach 48 trillion KRW. Currently, Samsung Electronics' market capitalization is around 450 trillion KRW, so even assuming the worst memory semiconductor market conditions, it is judged to be an absolutely undervalued phase."

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