[Click eStock] "Samsung Electronics, Downward Revision of Second Half Earnings... Difficult to Rebound for the Time Being"

[Asia Economy Reporter Ji Yeon-jin] BNK Investment & Securities forecasted on the 2nd that Samsung Electronics' stock price is unlikely to rebound for the time being, as the downward revision of its second-half performance due to increased inventory and price declines continues. However, they maintained a buy investment opinion and a target price of 77,000 won, stating that since the stock has already fallen sharply, the additional decline will be limited.

Minhee Lee, a researcher at BNK Investment & Securities, said, "The key indicator to watch regarding the industry outlook is inventory changes, and when inventory reaches its peak and stabilizes will likely be the turning point for performance momentum," adding, "Before that, whether there is a change in the financial tightening stance will serve as a leading indicator."

On the same day, BNK Investment & Securities revised down Samsung Electronics' Q3 revenue and operating profit estimates to 79.3 trillion won and 11.7 trillion won, respectively, down 1% and 17%. They forecast semiconductor operating profit to decrease by 35% year-on-year to 6.5 trillion won due to severe demand sluggishness.

The researcher said, "The global memory market has plummeted by 50% in just two months from the peak in May, which is more than twice as fast as the declines during the 2000 dot-com bubble burst and the 2008 financial crisis," adding, "The indicator to watch now is the rapidly increasing inventory trend. Although customer inventory adjustments are underway, the final consumption economy is deteriorating, so inventory adjustments will be slow, and inventory is expected to peak in the first quarter of next year."

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