[Click eStock] Fallen Samsung Electronics, Time to Embrace the 'Bottom' Now

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities announced on the 4th that it maintains a buy rating and a target price of 73,000 KRW for Samsung Electronics. It also emphasized that since the stock price is approaching the bottom range, it should be seen as an opportunity to increase weighting. The closing price on the 3rd was 55,400 KRW.

Samsung Electronics' Q4 earnings are expected to record sales of 69.9 trillion KRW (a 9% decrease from the previous quarter) and operating profit of 5.1 trillion KRW (a 52% decrease from the previous quarter), significantly missing market expectations. Poor performance across all business sectors is inevitable. In the memory semiconductor sector, shipment volumes are expected to fall short of the company's initial guidance due to stronger-than-expected inventory adjustments by customers.

Park Yu-ak, a researcher at Kiwoom Securities, explained, "Since the semiconductor market downturn has been partially anticipated, Samsung Electronics' stock price is already close to rock bottom," adding, "It is necessary to pay closer attention to the fact that the rapid market deterioration could lead memory suppliers to decide on additional production cuts."

He continued, "Given the strong inventory adjustments, the 'normalization timing of distribution inventory' will be brought forward, serving as a catalyst to turn around the memory semiconductor market," and added, "We recommend increasing weighting in this sector's top-pick stock."