[Click eStock] "Samsung Electronics' Stock Recovery Depends on DRAM Core Competitiveness"

Target lowered from 90,000 won to 75,000 won

On the 14th, Kiwoom Securities stated that Samsung Electronics needs to restore the core competitiveness of DRAM to recover its stock price. They also adjusted the target price downward from 90,000 KRW to 75,000 KRW, reflecting changes in the prices of general-purpose memory and the 2025-2026 earnings per share (EPS) forecasts. On the 14th, Samsung Electronics closed at 50,600 KRW. The investment opinion was maintained as 'Buy.'

Samsung Electronics announced preliminary results for the third quarter of this year, with sales of 79 trillion won and an operating profit of 9.1 trillion won. Compared to the second quarter, sales increased by 6.66%, but operating profit decreased by 12.84%. The photo shows Samsung Electronics Seocho Building in Seocho-gu, Seoul, on the 8th. Photo by Jinhyung Kang aymsdream@

Researcher Yuak from Kiwoom Securities analyzed, "Samsung Electronics' stock price has continued to decline, dropping sharply by 42% since July 11," adding, "Concerns during this period include the delay of Nvidia's Blackwell, which is expected to postpone the supply timing of Samsung Electronics' HBM3e 12hi later than initially anticipated, and the expansion of Changxin Memory Technologies (CXMT), which may cause Samsung Electronics' LPDDR4 market share to decline more steeply than expected." Additionally, weak demand is accelerating the timing of the DRAM price downturn, and NAND is also showing a steeper-than-expected industry downturn, which are also factors contributing to the decline.

In conclusion, regarding the ongoing stock price weakness, he judged that it likely stems from market participants' doubts about the "persistently wide technology gap in high-bandwidth memory (HBM)" and "general-purpose DRAM products being chased by China."

He believes that the core competitiveness of DRAM must be restored for the stock price to recover. Researcher Park Yuak stated, "The next product, HBM4, and the development of the 1cnm process to be applied to it must be pursued with full effort, going through a process that simultaneously achieves technological competitiveness and regains market participants' trust." Fortunately, the issues with 1cnm have begun to be resolved one by one, and Nvidia's Rubin, which will apply HBM4, is likely to be released with some delay, which will be an opportunity factor for Samsung Electronics to narrow the technology gap," he explained.

He advised that attention should be paid to 2025 as the year when the "DRAM business successfully improves its structure (transitioning from DDR4 to HBM3e facilities)." Researcher Park said, "More importantly, by converting LPDDR4 facilities, which are facing intensified competition with CXMT, to Nvidia-oriented HBM3e, Samsung Electronics can achieve structural improvement in its DRAM business similar to competitors." He predicted, "Since the stock price has plummeted amid numerous concerns, recovery can occur simply through the process of those concerns being resolved."