[Click eStock] "Samsung SDS Stable Growth Trend... Target Price Up"

On the 7th, SK Securities raised the target price for Samsung SDS to 210,000 KRW, stating that "with this year's structural improvements securing long-term growth drivers, an increase in corporate value is expected next year." The buy rating was also maintained.

On the same day, Kwansoon Choi, a researcher at SK Securities, said, "The fourth-quarter performance this year is expected to meet expectations. In the information technology (IT) services sector, sales are expected to rebound due to successful cloud transitions." He added, "ITO (IT outsourcing) sales to Samsung Electronics are also expected to increase by 2.9% compared to last year. The upward trend has continued since the low point in 2021." Although the logistics sector experienced somewhat sluggish results through the third quarter due to the disappearance of sales growth effects from last year's logistics crisis, sales and operating profit margins are expected to rebound in the fourth quarter with increased cargo volume. The expected sales and operating profit for the fourth quarter this year are 3.5159 trillion KRW and 202.6 billion KRW, respectively.

On the 28th of last month, Samsung SDS signed a contract worth 460.8 billion KRW for high-performance computing (HPC) cloud services utilizing the Dongtan data center. As a result, IT investments by client companies are expected to gradually increase. The launch of generative artificial intelligence (AI) services is also anticipated in the first quarter of next year, leading to a 16.6% increase in IT service sector sales compared to this year, indicating high growth. In the logistics sector, stable sales growth is expected due to the expansion of customers for the digital logistics platform Cello Square.

Researcher Choi stated, "Next year, Samsung SDS's operating profit is expected to reach 916.8 billion KRW, surpassing last year's operating profit during the logistics boom." He added, "The abnormally high logistics sector sales in that year will normalize this year and record stable growth next year. The IT service sector is expected to grow steadily due to the effective growth of cloud services and anticipated increases in client IT investments."