Yuanta Securities has increased its target price for Samsung Electronics from 530,000 won to 630,000 won. Despite a slowdown in the rise of memory semiconductor prices, the firm expects a prolonged upcycle due to continued tight supply and demand. The investment recommendation remains a 'buy.'
On September 23, Yuanta Securities projected Samsung Electronics' operating profit for the third quarter to reach 99.86 trillion won, marking a 720.8% increase year-on-year and an 11.6% rise from the previous quarter. Revenue is estimated to be 212.19 trillion won, up 146.6% compared to the same period last year.
The improvement in performance is expected to be led by the memory business. The operating profit for the Device Solutions (DS) division is anticipated to hit 100 trillion won in the third quarter. Thanks to the full-scale sales of HBM4, the average selling prices (ASP) for DRAM and NAND are projected to rise by 18% and 16%, respectively, compared to the previous quarter.
Baek Gil-hyun, a researcher at Yuanta Securities, analyzed that considering the erosion of general-purpose DRAM production capacity by HBM and the growing demand for high-capacity memory due to the spread of AI inference, the resolution of supply constraints is likely to be delayed longer than expected. As a result, tight memory supply and demand conditions are expected to persist into 2027 and 2028.
He also suggested the possibility of increased shareholder returns due to the prolonged memory upcycle. Baek noted that if the upcycle lasts longer, Samsung Electronics' free cash flow (FCF) could structurally expand compared to the past, stating, 'Concerns about peak-out adjustments in stock prices present a buying opportunity from a medium- to long-term perspective.'
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.