[Click eStock] "Samsung Electronics Enters a Period Sensitive to Positive News... Heading to 80,000 Won"

[Asia Economy Reporter Kwon Jae-hee] KB Securities maintained a 'Buy' rating on Samsung Electronics on the 7th and raised the target price from the previous 75,000 KRW to 80,000 KRW.

It is analyzed that memory prices approached the bottom in the second quarter. Currently, memory prices have fallen by 50% in the first quarter, and all global memory companies are estimated to have DRAM production costs below the cost of production, while NAND has reached cash cost. Furthermore, if DRAM and NAND prices fall an additional 29% in the first half of this year, DRAM is expected to reach cash cost in the second quarter. Therefore, the expectation that DRAM and NAND prices will reach cash cost can be interpreted as a signal that the memory semiconductor market is approaching the bottom.

This year, Samsung Electronics' facility investment is expected to be around 53 trillion KRW, similar to the previous year. Since it is budgeted as future investment unrelated to supply, memory facility investment this year is expected to decrease by 13% compared to the previous year. After the fourth-quarter earnings conference call, it is judged that the consensus on Samsung Electronics' earnings has settled downward, and the stock price is expected to enter a phase where it is insensitive to negative factors and sensitive to positive factors.

KB Securities researcher Kim Dong-won analyzed, "AI, including ChatGPT, has a clear growth direction and is definitely a positive factor for future memory demand," adding, "Samsung Electronics' actual production cuts will have a significant impact on improving memory supply and demand starting from the third quarter of this year."