[Click eStock] "Samsung Electronics Expects Non-Memory Business Profit to Double This Year"

[Asia Economy Reporter Hwang Yoon-joo] Hana Financial Investment has given Samsung Electronics a "Buy" rating with a target price of 101,000 KRW, stating that although there are challenges in stabilizing mass production in the non-memory business, operating profit is expected to double this year.

Kim Kyung-min, a researcher at Hana Financial Investment, said, "The business with both expectations and concerns is non-memory (foundry)," and pointed out, "Looking at the TSMC case, after generating sales from the 7-nanometer leading-edge process in Q3 2018, it was only very recently that they overcame initial mass production costs to some extent and improved margins."

Researcher Kim added, "Samsung Electronics also needs to overcome this hurdle, but the impact of the non-memory business on the stock price is positive," analyzing that "because client companies are increasingly contributing to Samsung Electronics' non-memory business division."

He further estimated, "Samsung Electronics' non-memory operating profit to be 1.3 trillion KRW in 2021 and 2.6 trillion KRW in 2022."

Meanwhile, Samsung Electronics recorded its highest-ever quarterly sales of 76.6 trillion KRW in Q4 2021, and its annual sales in 2021 reached a record high of 280 trillion KRW. However, the stock price fell 2.73% compared to the previous day (27th). This was due to a risk-off sentiment favoring safe assets in Asian stock markets amid concerns over US interest rate hikes.

On the same day, the Shanghai Composite Index fell by 1.78%, the Hang Seng Index by 1.99%, and the Nikkei 225 Index by 3.11%, respectively, showing weakness.