Hanwha Investment & Securities projected that Samsung SDS will exceed market expectations for its second-quarter performance, driven by strong growth in its cloud and logistics businesses. The firm maintained a 'buy' rating and raised its target price from 210,000 won to 250,000 won.
Analyst Kim So-hye of Hanwha Investment & Securities estimated Samsung SDS's consolidated revenue for the second quarter at 3.697 trillion won, with an operating profit of 246.7 billion won. These figures represent increases of 6% and 9%, respectively, over market consensus.
Kim noted, "The revenue growth in the cloud and logistics sectors appears to be better than previously anticipated," adding that IT service revenue is expected to rise by 6.2% year-on-year, marking the highest growth rate in the past two years. She further explained that delayed projects have resumed and the expansion of the Managed Service Provider (MSP) business has accelerated, leading to an estimated 15.5% year-on-year growth in cloud revenue.
Looking ahead, Kim expects the positive trend in performance to continue in the second half of the year, particularly with the cloud business's revenue growth projected to recover to around 20%, driven by the MSP and Cloud Service Provider (CSP) sectors.
The analyst highlighted that during a recent Analyst Day, the company set a goal to secure over 800 MW of Automatic Identification and Data Capture (AIDC) infrastructure by 2031, aiming for related revenue of 6.6 trillion won. She assessed this plan as highly feasible, considering the company's financial capacity and demand from group companies. She added that revenue from the Dongtan West data center will begin to be reflected this year, with contributions expected from the Korean AICC (40 MW) and Gumi AIDC (60 MW) in succession.
Kim stated, "This year is expected to be a period of momentum for capital utilization strategies," and predicted that if visible results are confirmed throughout the year, the current valuation discount factors are likely to be resolved.
* This article has been translated by AI.
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