[Click eStock] "Samsung Electronics, DRAM Turns to Deficit... Early Sign of UP Cycle"

Hi Investment & Securities analyzed that Samsung Electronics' stock price has been experiencing a rebound and subsequent decline after forming a bottom, which is a phenomenon that always occurs in the early stages of a long-term semiconductor stock price up cycle.

On the 20th, Hi Investment & Securities forecasted Samsung Electronics' sales and operating profit for the first quarter of this year to be KRW 62.84 trillion and KRW 1.21 trillion, respectively, in a report.

Hi Investment & Securities stated, "We believe that first-quarter DRAM and NAND shipments fell short of the existing guidance due to customers' continuous inventory reduction policies, resulting in an additional decline in the average selling price (ASP) to increase shipments," adding, "The DRAM segment is also expected to turn to a loss." The first-quarter average KRW-USD exchange rate exceeding expectations was analyzed as a positive factor for performance.

Hi Investment & Securities explained, "Despite the recent rebound in some leading economic indicators, the semiconductor industry downturn is approaching its peak," and added, "Samsung Electronics' expected book value per share (BPS) for this year is still being revised downward, which is the reason for the recent stock price decline."

They continued, "The pattern of rebound and subsequent decline after forming a stock price bottom is a phenomenon that always appears in the early stages of a long-term semiconductor stock price up cycle because there is a lag of more than six months between leading economic indicators and the semiconductor industry conditions."

They also said, "The year-on-year change rate of global liquidity is expected to shift to a full-fledged upward trend starting in April," and added, "The U.S. Institute for Supply Management (ISM) manufacturing index, China's Credit Impulse index, and China's IT demand year-on-year change rate are judged to be bottoming out."

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