Concerns about the slowdown in the semiconductor industry have led securities firms to continue lowering their expectations for Samsung Electronics in the new year.
According to the financial investment industry on the 1st, Korea Investment & Securities lowered its target price for Samsung Electronics from the previous 83,000 won to 77,000 won, a decrease of 7%. The firm maintained its 'buy' investment opinion.
Cha Min-sook, a researcher at Korea Investment & Securities, projected that the growth of the memory semiconductor market would be limited in 2025, following 2024. She assessed that it is crucial to limit supply to prevent a decline in the average selling price (ASP).
Cha noted, "The supply adjustment by Samsung Electronics, which has the largest production capacity (CAPA), is important," adding, "The risk of an average selling price decline due to overproduction has a more negative impact on commodity memory than on high-value products like high-bandwidth memory (HBM)." She continued, "Given that Samsung Electronics has a relatively large structure in commodity memory, managing profitability through supply adjustment in 2025 will be crucial."
Cha estimated that Samsung Electronics' performance in the fourth quarter of last year (October to December) likely fell short of market expectations. Korea Investment & Securities presented Samsung Electronics' consolidated operating profit for the fourth quarter of last year at approximately 7.3 trillion won, which is below the market forecast of 8.9 trillion won.
Cha stated, "With poor fourth-quarter results, there is a possibility that Samsung Electronics' stock price could decline further in the short term; however, it may find support near its previous low." She added, "Considering that the primary reason for the decline in Samsung Electronics' stock price is that it has been excluded from the upward trend centered around artificial intelligence (AI) and HBM, the discount factor will diminish as the supply timing from NVIDIA approaches in the latter half of the year."