[Click eStock] "Samsung Electronics Q1 Operating Profit Estimated at 5.5 Trillion Won... Target Price Up"

Meritz Securities on the 14th revised its Q1 operating profit estimate for Samsung Electronics upward from 3 trillion KRW to 5.5 trillion KRW. The target price was also raised to 100,000 KRW, maintaining a 'Buy' investment rating.

Researcher Kim Sun-woo stated, "We have upgraded Samsung Electronics' Q1 NAND shipment volume, DRAM prices, and smartphone shipment volume, raising the operating profit estimate from the previous 3 trillion KRW to 5.5 trillion KRW."

He explained, "Although meaningful results have yet to be derived from specialty DRAM such as HBM, the trailing legacy memory price increases are leading not only to improved earnings but also to the reversal of inventory valuation loss provisions, resulting in stronger-than-expected performance."

He also diagnosed, "The demand environment for legacy memory is improving beyond expectations, and the reversal of inventory valuation loss provisions is expected to exceed 1 trillion KRW within the quarter. For LSI, an operating loss of 800 billion KRW is still anticipated."

He continued, "In the MX division, the smartphone and Galaxy S24 shipment volume estimates have been raised from the previous 57 million units and 13.2 million units to 60 million units and 13.5 million units, respectively," adding, "Operating profit is expected to increase to 3.8 trillion KRW compared to the previous 3.5 trillion KRW." Estimates for SDC, VD·home appliances, and Harman remain largely unchanged.

He noted, "The polarization of memory demand continues amid rising concentration in artificial intelligence (AI) servers," and added, "The company's memory policy, which is facing uncertainties in high-end smartphone recovery, delays in foundry performance improvements in leading-edge processes, and difficulties in securing major HBM customers, is expected to be thoroughly focused on profitability."

He further forecasted, "Contrary to market concerns, the company's DRAM capacity is expected to peak around Q2 and then decline again," and predicted, "Rather than expanding P3 and P4, memory market conditions will improve through supply restrictions during the transition to 1b and 1cnm in the second half, continuing until the end of 2025."

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