[Click eStock] "Samsung Electronics Q4 Operating Profit Expected to Slightly Improve"

Meritz Securities on the 2nd forecasted that Samsung Electronics' operating profit in the fourth quarter of last year would slightly improve compared to the third quarter. Accordingly, it issued a 'Buy' investment rating with a target price of 95,000 KRW.

Kim Sun-woo, a researcher at Meritz Securities, stated, "The operating profit for the fourth quarter of 2023 is expected to be 4.4 trillion KRW, a slight improvement compared to the previous quarter (2.4 trillion KRW)."

Researcher Kim explained, "While focusing on maximizing memory sales, the Device Solutions (DS) division's operating loss is expected to significantly decrease from 3.7 trillion KRW in the previous quarter to 600 billion KRW, but the Mobile Experience (MX) division's operating profit is expected to shrink from 3.3 trillion KRW to 2.3 trillion KRW."

Semiconductor operating profit is expected to decrease by 600 billion KRW. Researcher Kim diagnosed, "In a situation where some product market shares have even been reversed by memory competitors, the company's response strategy in the fourth quarter of last year was shipment concentration," adding, "With the base effect from the previous quarter, the fourth quarter DRAM BG is estimated to have reached 27%, and NAND 41% levels."

He stated, "Regarding operating profit margins, DRAM is expected to achieve a turnaround at 13% after four quarters, but NAND is estimated to remain in the loss zone at -32%."

Fortunately, profitability recovery is expected as the DRAM production cut rate is reduced faster than anticipated. Researcher Kim predicted, "The production cut rate is expected to shrink from 35% to around 15% in the first quarter of this year," and "From the second quarter of this year, fixed cost allocation and profitability recovery due to the reduction in production cuts are expected."

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