[Click eStock] "Samsung Electronics, Stock Price to Rise After Recording 2Q Earnings Bottom"

On the 25th, KB Securities maintained its investment opinion of 'Buy' and a target price of 80,000 KRW for Samsung Electronics.

Starting from the second quarter, Samsung Electronics is simultaneously implementing indirect production cuts through production line rearrangement and direct production cuts by reducing wafer input volume. As a result, the memory semiconductor inventory held by Samsung Electronics peaked in the second quarter, and a supply reduction effect is expected from the second half of the year. Considering that since 2007, Samsung Electronics' stock price has started to rise from the quarter when memory semiconductor inventory peaked during the semiconductor downturn cycle, it is expected that this cycle will be no exception. In other words, Samsung Electronics' stock price is expected to begin an upward trend starting from the second quarter, when inventory is anticipated to peak.

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Despite the possibility of a return to losses in the second quarter, expanding geopolitical risks between the US and China, and concerns over a prolonged semiconductor downturn cycle, Samsung Electronics' stock price is expected to gradually raise its bottom as the second quarter earnings bottom out.

Dongwon Kim, a researcher at KB Securities, analyzed, "From the third quarter, DRAM and NAND prices will significantly slow down, reducing inventory valuation losses, and Samsung Electronics' semiconductor performance will form a bottom in the second quarter." He added, "Starting from the third quarter, as customers' semiconductor inventories return to normal levels and Samsung Electronics' semiconductor inventory begins to shrink, inventory health is expected."

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