[Click eStock] "Samsung Electronics, Earnings Bottom Expected in Q1 Next Year"

D-RAM Price Decline, TV Off-Season Impact
Improvement Expected from Q2 Next Year... "Global Semiconductor Leading Stocks Anticipated"

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] There is a forecast that Samsung Electronics' quarterly earnings will hit their lowest point in the first quarter of next year. Although there will be some stagnation due to the decline in DRAM and NAND flash prices, it is analyzed that performance will gradually improve thereafter.

On the 17th, Shinhan Financial Investment maintained its 'Buy' rating and target price of 96,000 KRW for Samsung Electronics based on this outlook. The closing price on the previous day was 77,800 KRW.

Shinhan Financial Investment expects Samsung Electronics' sales in the fourth quarter of this year to reach 74.992 trillion KRW and operating profit to be 15.178 trillion KRW, representing increases of 21.8% and 67.7% respectively compared to the same period last year. This is generally in line with market consensus.

The first quarter of next year is expected to be somewhat sluggish. Sales are projected at 68.153 trillion KRW and operating profit at 11.023 trillion KRW, which would be increases of 4.2% and 17.5% compared to the previous quarter, but decreases of 9.1% and 27.4% compared to the previous quarter respectively. Researcher Choi Doyeon of Shinhan Financial Investment explained, "This is due to the decline in DRAM and NAND flash prices, reduced OLED production, and the TV off-season."

However, performance is expected to improve starting from the second quarter of next year. In particular, the semiconductor division is expected to lead the improvement. Researcher Choi said, "Due to the normalization of IT supply chain disruptions, the launch of new server platforms by Intel and AMD, the transition to DDR5, and the U.S. Department of Defense's cloud transition project (JWCC), memory prices are expected to rebound in the second quarter of next year," adding, "Non-memory performance will continuously improve quarterly due to new orders and price increases."

Based on this, Samsung Electronics is expected to play a leading role in the global semiconductor market next year. Researcher Choi emphasized, "The impact of IT supply chain disruptions negatively affected the memory industry, and Samsung Electronics' non-memory order activities fell short of market expectations, causing Samsung Electronics' stock price to drop 4.2% while the Philadelphia Semiconductor Index rose 40.7% this year," and added, "We expect memory to rebound and continuous news of new non-memory orders in the second quarter of next year."

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