Where is the stock price of 'Lee Jae-yong's Samsung Electronics' heading... Will it surpass 60,000 and move towards 70,000 Electronics?

[Asia Economy Reporter Lee Seon-ae] Samsung Electronics' stock price soared past 60,000 KRW intraday for the first time in two months, fueled by the 'Lee Jae-yong Chairman Era,' drawing attention to whether it can rebound further to 70,000 KRW. While some voices caution against excessive expectations as Samsung Electronics' stock price, which briefly rose on news of the 'Lee Jae-yong Chairman Era,' fell the next day due to concerns over the semiconductor market, securities firms remain confident in recommending buying, maintaining or raising their target prices.

According to financial information provider FnGuide on the 29th, the consensus target price for Samsung Electronics proposed by 22 securities firms was 75,682 KRW as of the 26th. Samsung Electronics closed at 59,500 KRW on the 27th, up 1,000 KRW (0.17%) from the previous trading day. It recorded an intraday high of 60,100 KRW for the first time in two months. Despite a more than 30% year-on-year plunge in third-quarter operating profit due to the worsening memory semiconductor market, the stock price surged on news of Vice Chairman Lee Jae-yong's promotion to chairman. Samsung Electronics traded above 60,000 KRW intraday for the first time since August 26, about two months ago. However, the next day, the stock price closed at 57,300 KRW, down 3.7% from the previous day. After five consecutive days of gains since the 21st, the stock price turned downward. Concerns over the semiconductor market led to the stock price decline again.

However, securities firms highly evaluate Samsung Electronics' determination not to implement artificial production cuts despite the semiconductor market's downcycle.

Kim Rok-ho, a researcher at Hana Securities, said, "Samsung Electronics plans to execute capital expenditures even amid the semiconductor market downturn to secure infrastructure investment and lead-edge processes, laying the groundwork for mid- to long-term growth," adding, "Compared to competitors, it has shown a distinctly differentiated approach to handling the downcycle based on superior profitability and abundant cash."

Accordingly, some securities firms have raised their target prices after Samsung Electronics' earnings announcement. NH Investment & Securities raised Samsung Electronics' target price from 67,000 KRW to 72,000 KRW. Do Hyun-woo, a researcher at NH Investment & Securities, said, "Due to memory companies' reduced CAPEX (capital expenditure) this year, a shortage of memory semiconductors is expected next year," adding, "The profit increase from this is likely to be larger than previously anticipated."

Daol Investment & Securities also raised Samsung Electronics' target price from 68,000 KRW to 69,000 KRW. Kim Yang-jae, a researcher at Daol Investment & Securities, said, "Samsung Electronics, with market dominance and cost competitiveness, is expanding capital expenditures despite the memory market slowdown, unlike competitors who are cutting production," adding, "This is aimed at securing mid- to long-term business stability rather than restarting a chicken game, and we recommend increasing holdings when the stock price shows weakness due to related concerns."

There were also opinions recommending staggered buying at lows during price adjustments, expecting the fruits of proactive investments when the market recovers. Song Myung-seop, a researcher at Hi Investment & Securities, said, "Even in the worst case, if Samsung Electronics' stock price falls to the historical low multiple of 0.94 times (46,200 KRW), the maximum downside risk is about 12% from the previous low," adding, "Currently, the stock price is judged to have upside potential that far outweighs the downside risk."

Poor earnings are expected to continue next year as well. However, from a long-term perspective, a positive outlook is presented, anticipating improvement in the semiconductor market.

Baek Gil-hyun, a researcher at Yuanta Securities, said, "Considering memory semiconductor suppliers' production cut plans, inventory peak-out is likely after the fourth quarter, which should be positive for Samsung Electronics' stock price in the short term," adding, "From a mid- to long-term perspective, stable memory semiconductor business profitability compared to competitors and the technological status centered on extreme ultraviolet (EUV) processes are expected to act as momentum for corporate value appreciation."

Kim Woon-ho, a researcher at IBK Investment & Securities, said, "Recently, conservative investments and earnings forecasts by competitors have spread awareness of the market bottom, and while a rebound in DRAM prices is unlikely, the decline is not expected to deepen further after the third quarter," adding, "Supply adjustments in the second half of next year are expected to help balance supply and demand."

Oh Gyu-jin, a researcher at DB Financial Investment, said, "Samsung Electronics' earnings downturn due to the semiconductor market slump is expected to continue for the time being," but added, "On the other hand, due to the market slump and increased equipment lead time (time from order to delivery), new investments by memory companies are limited, meaning supply growth is restricted, so a rebound in the memory market is expected after the third quarter of next year, triggered by increased shipments despite lower memory prices."

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