Hana Securities adjusted its outlook for Samsung Electronics' fourth-quarter performance downward from the previous estimate, focusing on semiconductors and displays. The investment opinion of 'Buy' was maintained, but the target price was lowered from 95,000 won to 84,000 won, a decrease of 11.16%. Samsung Electronics' previous transaction close was 54,400 won.
Hana Securities forecasted Samsung Electronics' last year's fourth-quarter revenue to be 77.5 trillion won, a 14% increase compared to the same period last year, while operating profit is expected to rise 163% year-on-year to 7.4 trillion won. This is a downward adjustment of performance projections focusing on semiconductors and displays from the previous estimates.
Kim Rok-ho, a researcher at Hana Securities, noted, "Both DRAM and NAND flash experienced a larger-than-expected price drop due to weak demand in the upstream industry," adding, "In the non-memory institutional sector, costs are expected to be reflected again, resulting in losses at the level of the previous quarter."
He also projected that in the display institutional sector, Samsung's market share in North American customers would decline compared to the previous quarter due to the stabilization of competing firms' yields, and it would record poorer performance than previously expected. Kim said, "The VS and home appliance sectors are expected to suffer a decline in profitability due to limited demand and price competition during the year-end shopping season," and added, "Smartphones are estimated to have shrunk in both volume and price compared to the previous quarter due to reduced flagship proportions as initially projected."
In addition, he adjusted the assumptions for DRAM and NAND flash prices downward overall, leading to a downward revision of the 2025 performance outlook. Kim said, "Previously, it was assumed that the general DRAM price would not decline in the fourth quarter of 2024 and that the price would drop by around 5% in the first quarter of this year, but this would be mitigated by an increase in HBM sales proportion," adding, "However, starting from the fourth quarter of 2024, general DRAM prices began to decline, and the launch of HBM sales to major clients was delayed longer than expected, leading to a downward adjustment of DRAM price expectations from previous estimates." He also mentioned that a more conservative price than initially assumed was applied to NAND flash.
Kim assessed, "Unlike past cycles, there remains a possibility that the price decline may wrap up in just two quarters, and considering the advance reflection in stock prices, I believe there will be opportunities for proportion expansion in the first quarter." He also highlighted that with a growing demand for customized semiconductors (ASIC), led by Broadcom in the U.S., Samsung Electronics' HBM capacity remains in a position to secure operational flexibility compared to competitors. Therefore, the potential for HBM sales growth also exists.