[Click eStock] "Only Upside Left for Samsung SDS... Investment Opinion Upgraded to 'Buy'"

[Asia Economy Reporter Myunghwan Lee] DB Financial Investment announced on the 31st that it has upgraded its investment rating on Samsung SDS (Samsung SDS) from neutral to buy, expecting better-than-expected earnings. The target price was also raised by 12.5%, from the previous 160,000 KRW to 180,000 KRW.

DB Financial Investment's assessment is that the first-quarter earnings this year exceeded expectations. The company's first-quarter revenue is projected to be 3.9227 trillion KRW, with an operating profit of 233 billion KRW, surpassing initial estimates. Despite concentrated investments in the IT services sector, such as strengthening the cloud management service (MSP) business, efficient cost control is expected to yield a profitability rate of over 13%. The logistics division is also expected to exceed expectations in both revenue and profitability due to strong logistics freight rates. Even if logistics freight rates decline in the future, an increase in cargo volume could maintain a stable trend. DB Financial Investment forecasts that Samsung SDS's operating profit this year will increase by 24% compared to the previous year, breaking away from two consecutive years of operating profit decline.

The performance of the IT services sector is also anticipated. The company is preparing for the full-scale launch of the MSP business in the second half of the year through organizational restructuring and talent acquisition to strengthen its cloud business. The sales channels are also diversifying through collaboration with global cloud partners. The solutions division plans to expand its Software as a Service (SaaS) business centered on key solutions such as Enterprise Resource Planning (ERP), Manufacturing Execution System (MES), and Supply Chain Management (SCM). DB Financial Investment researcher Seongryul Kwon analyzed, "These efforts will revitalize the stagnant IT services business."

Researcher Kwon stated, "Considering the expected future performance of IT services and the logistics business, which continues to set record-high earnings due to rising freight rates, we are raising this year's operating profit forecast by 12%. The stock price has also bottomed out following the shock from the recent major shareholder's stake sale, so now it only has room to rise," he evaluated.

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