[Click eStock] "Samsung Electronics, Top Pick in Semiconductor Sector... Target Price Raised"

On the 31st, KB Securities designated Samsung Electronics as the top preferred stock in the semiconductor sector and raised its target price to 82,000 KRW.

Dongwon Kim, a researcher at KB Securities, explained, "The target price increase reflects the improvement in supply and demand and price increases following the entry into the memory upcycle from the second quarter, leading us to revise the operating profit for 2025 and 2026 upward by 10.4% and 11.5%, respectively, to 35.1 trillion KRW and 48.1 trillion KRW."

He added, "With the inventory adjustment of client companies concluding by the end of March, new memory purchase demand is expected to increase significantly from the second quarter."

Recently, the supply of DRAM and NAND has fallen short of even half of the client companies' requested order volumes, causing supply to lag significantly behind the pace of demand recovery and increasing rush orders from clients. Accordingly, Samsung Electronics is expected to push for price increases of DRAM and NAND starting in April.

Researcher Kim forecasted that Samsung Electronics' first-quarter operating profit will be 5.2 trillion KRW, in line with market consensus, and that the earnings growth trend will continue through the fourth quarter, with the first quarter as the bottom. In particular, he projected the DS (semiconductor) operating profit to improve sharply from 500 billion KRW in Q1 to 2.8 trillion KRW in Q2, 6.3 trillion KRW in Q3, and 8.1 trillion KRW in Q4.

Kim stated, "From the second quarter of 2025, DRAM and NAND demand is expected to exceed supply, and the trend of improved supply and demand for general-purpose memory will continue into the second half of the year," analyzing that "▲ the demand growth rate for DRAM and NAND in 2025-2026 (15%) exceeds the production growth rate (10%), ▲ client companies have completed inventory adjustments and entered normal inventory levels (6-7 weeks) since the end of March, and ▲ the possibility of Nvidia HBM3E 12-layer supply expansion in the second half of this year is expected to improve the DRAM product mix and reduce supply."

He further explained, "Especially, the iPhone 17, scheduled for release in the second half of this year, will inevitably expand memory capacity (from 8GB to 12GB) to drive Apple Intelligence, which is expected to act as a catalyst for mobile DRAM demand going forward."