[Click eStock] "Samsung Electronics Posts Results Beyond 1Q Outlook... Expected to Grow More in 2Q"

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[Asia Economy Reporter Myunghwan Lee] NH Investment & Securities announced on the 7th that it maintains a buy rating and a target price of 105,000 KRW for Samsung Electronics, citing better-than-expected performance despite the off-season.

Samsung Electronics announced its preliminary earnings for the first quarter of this year on the same day. Samsung Electronics' preliminary Q1 sales increased by 0.6% quarter-on-quarter to 77 trillion KRW, and operating profit rose by 2% quarter-on-quarter to 14.1 trillion KRW. The operating profit exceeded both NH Investment & Securities' estimate of 13.9 trillion KRW and the market consensus of 13 trillion KRW.

NH Investment & Securities' estimated operating profits by segment are ▲Semiconductors 8.1 trillion KRW (down 9% quarter-on-quarter) ▲Display 900 billion KRW (down 34% quarter-on-quarter) ▲Smartphones & Networks (IM) 4.2 trillion KRW (up 59% quarter-on-quarter) ▲Consumer Electronics (CE) 700 billion KRW (unchanged from the previous quarter). Memory semiconductors showed a favorable price decline due to strong demand centered on data centers, sales focused on high-priced products, and an aggressive inventory expansion strategy. The IM segment is estimated to have grown with smartphone shipments increasing by 7% quarter-on-quarter to 77 million units in Q1, despite issues such as the 'Game Optimization Service (GOS)'. However, the foundry segment was analyzed to have underperformed due to yield issues with the latest processes.

It is expected that growth will accelerate further in the second quarter. NH Investment & Securities forecasts Samsung Electronics' Q2 operating profit to increase by 6% from Q1 to 14.9 trillion KRW. The profit growth is predicted to be led by memory semiconductors. DRAM is expected to offset the slowdown in smartphone and PC demand with limited supply. NAND is projected to see price increases due to supply disruptions caused by ongoing industry process-related incidents.

Researcher Doh Hyun-woo of NH Investment & Securities stated, "DDR5 shipments will begin in earnest in Q3, and data center investment demand is expected to increase with the new Intel 'Sapphire Rapids' CPU scheduled for shipment in Q2," adding, "New demand expected in the second half of the year is also positive."

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