KB Securities has maintained a target price of 600,000 won and a 'buy' rating on Samsung Electronics. The firm believes that the company has entered a phase of aggressive investment expansion due to the implementation of a large-scale shareholder return policy and improvements in the memory market.
Kim Dong-won, head of research at KB Securities, stated, "The scale of the shareholder return policy, which will be announced soon, could expand from the current annual 9.8 trillion won to a minimum of 100 trillion won and a maximum of 200 trillion won. This could serve as a catalyst for a reevaluation of the stock price."
KB Securities forecasts that Samsung Electronics will achieve an operating profit of 112 trillion won in the third quarter, an 817% increase compared to the same period last year, marking the fourth consecutive quarter of record performance. The operating profit margins for DRAM and NAND flash are estimated at 83% and 71%, respectively.
The firm also anticipates that the memory supply shortage will continue for the time being. Currently, the fulfillment rate of memory demand from major tech companies is around 60%, and since it takes over three years to establish new production facilities, a supply shortage is expected to persist for at least three years.
Kim added, "By 2027, the average selling price (ASP) of Samsung Electronics' HBM is expected to more than double compared to the previous year, and the market share for HBM4 is projected to reach 44%, securing the top position. We are currently in a phase of confident buying."
KB Securities predicts that Samsung Electronics' annual operating profit will reach 381.8 trillion won this year and 575.4 trillion won next year.
* This article has been translated by AI.
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