Sangsangin Securities announced on July 1 that it expects the supply-demand imbalance in artificial intelligence (AI) memory to deepen, leading to a prolonged structural price increase. As a result, the firm raised its target price for Samsung Electronics from 250,000 won to 580,000 won while maintaining a 'buy' rating.
Jung Min-kyu, a researcher at Sangsangin Securities, stated, "In the second quarter, DRAM and NAND prices exceeded market expectations, significantly enhancing the profitability of the Device Solutions (DS) division to unprecedented levels. The recent announcement of large-scale long-term investments strengthens the long-term visibility of memory leadership through the establishment of new bases outside the capital region."
However, Sangsangin Securities anticipates that Samsung Electronics' second-quarter results will slightly fall short of market forecasts. The firm projects Samsung's second-quarter revenue to reach 178.3 trillion won, a 139.1% increase year-on-year, and an operating profit of 83.9 trillion won, up 1,693.8% from the same period last year.
Jung noted, "The results will be below market expectations due to the retroactive accounting of performance bonuses for the first half of the year. However, normal operating profit, excluding performance bonuses, is expected to exceed 100 trillion won."
Looking ahead to the second half of the year, the firm predicts that the upward trend in memory prices will continue. Jung explained, "While data center customers are facing increased cost burdens, demand remains robust due to expanded AI investments. The growing share of long-term supply contracts (LTA) will enhance price and volume visibility, supporting the downside of performance."
Consequently, Sangsangin Securities forecasts Samsung Electronics' third-quarter revenue and operating profit to be 207.9 trillion won and 110.7 trillion won, respectively. The firm expects the company's annual revenue for the year to reach a record 738.4 trillion won, with an operating profit of 372.9 trillion won.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.