[Click eStock] "Samsung Electronics Raises Q2 Operating Profit Forecast by 15%"

[Asia Economy Reporter Park Jihwan] Hi Investment & Securities announced on the 1st that it has raised its Q2 operating profit forecast for Samsung Electronics from the previous KRW 5.9 trillion to KRW 6.8 trillion, a 15.3% increase. It also issued a buy rating and a target price of KRW 67,000.

Song Myungseop, a researcher at Hi Investment & Securities, said, "We are raising Samsung Electronics' Q2 operating profit forecast for this year from KRW 5.9 trillion to KRW 6.8 trillion," adding, "the negative impact of COVID-19 on IT Set shipments such as smartphones and PCs was not significant, and it is judged that the IM and CE divisions also generated favorable profits."

He also analyzed that the smartphone shipment growth rate in the Chinese market in Q2 likely recovered significantly to a 2% increase year-on-year from -35% quarter-on-quarter. The shipment growth rate of Taiwan NB ODM is also expected to improve sharply from -10% quarter-on-quarter to 22%.

Researcher Song explained, "Smartphone shipments were expected to be only 49 million units, but shipments rapidly increased after May and are judged to have recovered to 54 million units," adding, "Due to cost efficiency, the IM division's profit margin is likely to have been much better than initially feared." He added that CE division profits are also expected to have achieved similar profits to the previous quarter due to better-than-expected TV shipment volume and ASP trends.

He forecasted, "If Samsung Electronics' quarterly results come out as our forecast, the quarterly earnings bottom was already formed in Q1," and "This earnings improvement will have a very positive effect on the company's stock price going forward."