NH Investment & Securities evaluated on the 11th that while negative factors have been substantially reflected in Samsung Electronics' stock price, the upward momentum is also limited. NH Investment & Securities maintained its investment opinion of ‘buy’ on Samsung Electronics, but lowered the target price from 90,000 won to 75,000 won.
Ryu Young-ho, a researcher at NH Investment & Securities, explained that the stock price of Samsung Electronics is trading at a price-to-book ratio (PBR) of around 1 due to sluggish demand in the upstream industry, doubts about technological competitiveness, and concerns about competition from China’s Changxin Memory Technologies (CXMT).
However, Researcher Ryu foresees that Samsung Electronics' stock price will find it difficult to rebound in the short term. He noted, “The current momentum regarding demand is also limited due to significant uncertainties,” adding, “I expect the stock price to exhibit a range-bound movement for the time being.”
In particular, the demand for low-cost semiconductor products has been strong recently, highlighting the influence of CXMT even more. This has also contributed to a sharper-than-expected decline in prices for general-purpose memory semiconductor products.
Researcher Ryu noted that it is somewhat positive that the three memory semiconductor companies, including Samsung Electronics, SK Hynix, and Micron Technology in the United States, are seeking to adjust supply. Ryu stated, “All three memory companies are strongly committed to high-bandwidth memory (HBM) and are taking a conservative stance on supply,” adding, “This will help mitigate the sharp decline in memory semiconductor prices to some extent moving forward.”
Researcher Ryu projected that Samsung Electronics will record sales of 79.7 trillion won and an operating profit of 9.6 trillion won in the fourth quarter (October to December) of this year. He explained, “Amid sluggish performance in the device experience (DX) sector and the display (SDC) sector, the device solution (DS) sector will also continue to face difficulties in the foundry (semiconductor contract manufacturing) business,” and added, “I hope for an improvement in performance compared to the last third quarter, which was sluggish due to one-time expenses.”