Renewed Foreign Interest in Samsung Electronics 'Love Calls'

Net Buying for 16 Consecutive Trading Days Until the Previous Day
Longest Since 24 Trading Days in 2019
Expectations for Semiconductor Industry Improvement... Attractive Dividend and Stock Price Growth
Target Price Raised to 110,000 Won

[Image source=Yonhap News]

[Asia Economy Reporters Song Hwajeong and Ji Yeonjin] Foreign investors have been sending strong love calls to Samsung Electronics, continuing the longest streak of net buying since 2019. Securities firms are also raising their target prices for Samsung Electronics. Last year, Samsung Electronics fell to the 60,000 KRW range due to foreign selling, and target prices were consecutively downgraded, but the atmosphere has clearly changed since the end of the year.

According to the Korea Exchange on the 5th, foreign investors have net bought Samsung Electronics for 16 consecutive trading days from the 13th of last month to the day before. This is the longest period of net buying since July 2019. At that time, foreign investors continued net buying Samsung Electronics for a month (24 consecutive trading days) from June 25 to July 26.

Last year, foreign investors showed a one-sided "sell" stance toward Samsung Electronics. They net sold 17.9784 trillion KRW, the largest amount sold. Considering that they net sold 25.6011 trillion KRW in the KOSPI, Samsung Electronics accounted for about 70% of the total foreign net selling last year. Samsung Electronics, which had raised expectations for reaching the 100,000 KRW range by soaring to 96,800 KRW during trading early last year, fell to the 70,000 KRW range due to continuous foreign selling and even dropped to the 60,000 KRW range in October. From November, foreign investors gradually turned around, and changes began to appear. In December, except for just two days, they recorded net buying every day, intensifying the buying strength. This is because semiconductor industry conditions are expected to improve this year, and Samsung Electronics’ stock price has not risen as much compared to other semiconductor companies, increasing its relative attractiveness. Dongwon Kim, a researcher at KB Securities, said, "Considering this year’s industry improvement, dividends, and stock price growth, Samsung Electronics is the most attractive investment destination in the global semiconductor sector."

Samsung Electronics’ target prices are also being revised upward. On the same day, Hanwha Investment & Securities raised Samsung Electronics’ target price from 105,000 KRW to 110,000 KRW. On the same day, Korea Investment & Securities also raised it from 100,000 KRW to 105,000 KRW. This is based on the expectation that the memory down cycle, which weighed down Samsung Electronics’ stock price last year, will end shortly and enter a profit cycle. Wonshik Lee, a researcher at Korea Investment & Securities, said, "The strength in spot prices continues, so future DRAM price estimates can be revised upward, which will also lead to upward revisions in profits for memory companies," adding, "The profit revision cycle for memory companies is expected to fully begin."

In August last year, the foreign securities firm Morgan Stanley released a report titled "Memory, winter is coming," which led to a series of downward revisions in Samsung Electronics’ target price. At that time, Morgan Stanley said, "Memory semiconductor supply has reached its peak and is exceeding demand," lowering Samsung Electronics’ target price from 98,000 KRW to 89,000 KRW. Following the impact of this report, foreign selling continued, causing Samsung Electronics’ stock price to plummet, and domestic securities firms also consecutively lowered their target prices for Samsung Electronics. Mirae Asset Securities lowered its target price by more than 14%, from 100,000 KRW to 82,000 KRW in October last year, and eBest Investment & Securities also cut it by 8%, from 95,000 KRW to 87,000 KRW. Shinhan Financial Investment lowered Samsung Electronics’ target price from 100,000 KRW to 96,000 KRW, and KB Financial (from 105,000 KRW to 100,000 KRW) and Eugene Investment & Securities (from 100,000 KRW to 93,000 KRW) also revised their target prices downward.

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