[Click e-Stock] "Samsung Electronics Expected to Triple Operating Profit This Year... Target Price Raised"

Target Price Raised from 160,000 Won to 180,000 Won

On January 6, KB Securities stated that Samsung Electronics’ operating profit this year is expected to triple compared to the previous year, and raised its target price from 160,000 won to 180,000 won. The investment opinion was maintained as ‘Buy’.

Kim Dongwon, an analyst at KB Securities, explained, “The target price was raised because we increased our 2026 operating profit estimate by 27.1% to 123 trillion won, reflecting higher memory demand.” He continued, “This year, the operating profit of the semiconductor (DS) division is projected to reach 105 trillion won, a fourfold increase, driven by rising generic memory prices and higher shipments of high-bandwidth memory (HBM). This would more than double the previous record for semiconductor operating profit (44.5 trillion won in 2018), marking an all-time high.” He added, “As of January, demand for DRAM and NAND exceeds supply by over 30%, and Samsung Electronics is expected to receive final quality approval for HBM4 from major big tech companies such as Nvidia and Google in the first quarter of this year, leading to a sharp increase in HBM shipments from the second quarter onward.”

KB Securities estimated Samsung Electronics’ fourth quarter results last year at 90 trillion won in revenue, up 19% year-on-year, and operating profit at 20.3 trillion won, up 213%. Kim stated, “This would be the highest quarterly result in 29 quarters since the third quarter of 2018, when operating profit reached 17.5 trillion won.” He added, “In particular, fourth quarter semiconductor operating profit is expected to reach 16.3 trillion won, a sixfold increase from the previous year, due to higher memory prices.”

KB Securities projected Samsung Electronics’ operating profit for the first quarter of this year at 25.2 trillion won, up fourfold year-on-year, and second quarter operating profit at 29.5 trillion won, up sixfold. The average quarterly operating profit in the second half is expected to reach 34 trillion won. Kim explained, “This year, Samsung Electronics’ operating profit is expected to surge to 123 trillion won, about three times higher than last year, due to higher DRAM prices and increased HBM shipments.” He added, “Samsung’s HBM shipments this year are expected to reach 112Gb, a threefold increase from the previous year, and its HBM market share is expected to double from 16% last year to 35%.”

Despite the recent sharp rise in the share price, there is still significant upside potential. Kim noted, “Even after the recent rally, Samsung Electronics is trading at a price-to-book ratio (PBR) of 1.8, which is a 44% discount to the industry average. This means it still has the lowest valuation among DRAM manufacturers worldwide, so there is the greatest potential for further share price increases.”