iM Securities noted on the 9th that Samsung Electronics is not expected to experience a significant decline in stock prices in the future, but more time is needed for a full-fledged increase, making a strategy of patiently seeking low point buying opportunities advantageous. They adjusted the target price from 71,000 won to 68,000 won and suggested an investment opinion of 'buy.' The previous trading day's closing price for Samsung Electronics was 57,300 won.
In the fourth quarter of last year, Samsung Electronics reported sales and operating profit of 75 trillion won and 6.5 trillion won, respectively, falling significantly short of expectations (sales of 77.3 trillion won and operating profit of 78 trillion won). The shortfall in sales indicates weaker product sales than expected, while the decline in operating profit suggests that poor profitability and a significant one-time expense likely occurred.
In the fourth quarter of last year, the average selling price (ASP) in the DRAM institutional sector is estimated to have increased by 9% due to a rise in high bandwidth memory (HBM) sales; however, the shipment growth rate likely fell short of previous expectations due to a slowdown in sales for PCs and smartphones. In the NAND segment, it is believed that production declined compared to the previous quarter due to sluggish demand from PCs and smartphones, in addition to a slowdown in eSSD sales.
iM Securities expects operating profit in the first quarter of this year to be similar to the previous quarter. Song Myung-seop, a researcher at iM Securities, explained, 'In the first quarter of this year, the price of DDR4 is expected to drop significantly, the decline in DDR5 prices will begin, and HBM shipment volume will stagnate, leading to a 6% decrease in DRAM ASP and more than a 10% drop in NAND ASP.' He also forecasted that due to seasonal decreases in demand and inventory reductions among client companies, it would be difficult to increase memory semiconductor shipments compared to the previous quarter.
In the first quarter of this year, the non-memory institutional sector is expected to show poor utilization, but due to the one-time expense liquidation effect from the second quarter of last year, losses are anticipated to decrease significantly compared to the previous quarter. Song added, 'Due to the effect of high-priced new smartphone releases, operational profit in the MX (Mobile Experience) and NW (Network) sectors of the company is expected to improve by 61% compared to the previous quarter to 3.4 trillion won.'
Research Institute Song analyzed that a downward adjustment of this year's earnings consensus (average projections from securities firms) is necessary. He noted that this year's 'operating profit projection is 21 trillion won, a 36% decrease from the previous year, and the current consensus in the market is still overly high,' adding, 'Although valuation multiples have significantly adjusted stock prices, the decline in per-share value due to the downward revision of the earnings consensus could limit a substantial rise in Samsung Electronics stock prices going forward.'