[Weekly HOT Stocks] Samsung Electronics' Stock Price 'Fluctuates' Amid Foreign Net Buying Pressure

Foreigners Net Bought Samsung Electronics Shares Worth 1.5995 Trillion KRW from 27th to 29th Last Month

Photo by Yonhap News

[Asia Economy Reporter Kum Boryeong] Samsung Electronics attracted attention for a week due to foreign investors' buying spree.

According to the Korea Exchange on the 1st, Samsung Electronics' stock price closed at 57,900 won on the 31st of last month. Compared to the 24th of last month, a week earlier, it rose by 6.83%.

In the early part of the week, foreign buying surged in Samsung Electronics, leading to a strong stock price. Foreigners net purchased Samsung Electronics shares worth 1.5995 trillion won over three trading days from the 27th to the 29th of last month. During this period, the stock price rose from 55,600 won to 58,600 won, and then to 59,000 won.

Samsung Electronics announced on the 30th of last month that its consolidated operating profit for the second quarter of this year increased by 23.48% year-on-year to 8.1463 trillion won. Sales during the same period decreased by 5.63% from the previous year to 52.9661 trillion won.

According to Hanwha Investment & Securities, the IT & Mobile (IM) division's solid performance led to the strong results in the second quarter. Samsung Electronics' operating profit by division in the second quarter was 5.43 trillion won for semiconductors, 1.95 trillion won for IM, and 730 billion won for Consumer Electronics (CE). Researcher Lee Soonhak of Hanwha Investment & Securities explained, "The semiconductor division's profitability greatly improved as server DRAM prices surged due to a sharp increase in inventory accumulation demand from server customers in the second quarter," adding, "The IM division exceeded sales expectations thanks to the global economic activity resumption from June, and recorded a favorable operating profit margin through cost reduction."

Brokerages have unanimously raised their target prices for Samsung Electronics. Hanwha Investment & Securities raised it from 67,000 won to 76,000 won, NH Investment & Securities from 66,000 won to 73,000 won, Mirae Asset Daewoo from 68,000 won to 76,000 won, and Daishin Securities from 68,000 won to 75,000 won.

The biggest reason brokerages raised Samsung Electronics' target price is the expectation of strong performance in the second half of the year. In particular, smartphone demand recovery is expected to accelerate in the second half. The researcher said, "Due to the spillover benefits of Huawei sanctions, a sharp increase in smartphone sales is expected, with operating profit exceeding 2 trillion won."