Korea Investment & Securities Co. said on the 7th that Samsung Electronics could see its earnings and share price gain momentum as sales of high-bandwidth memory (HBM), which had weighed on its valuation, normalize. It raised its target price to 180,000 won from 150,000 won and maintained its "buy" rating. The previous session's closing price for Samsung Electronics was 138,100 won.
Korea Investment & Securities Co. estimated that Samsung Electronics' sales and operating profit in the fourth quarter of last year rose 23% and 217% on-year to 93.3 trillion won and 20.6 trillion won. Higher average selling prices (ASP) for memory semiconductors supported the strong results.
Chae Min-suk, an analyst at Korea Investment & Securities Co., said, "Prices for both DRAM and NAND rose about 40% from the previous quarter," and added, "Memory semiconductor operating profit increased 12$ from the previous quarter to 17.2 trillion won, accounting for 84% of the company's operating profit."
Chae projected that Samsung Electronics could post 148 trillion won in operating profit this year. Chae said, "This year's HBM sales are expected to rise 170% from a year earlier, and market share to increase to 31% this year from 17% last year."
Korea Investment & Securities Co. picked Samsung Electronics as the sector's second-preferred stock. Chae said, "With a higher mix of high-margin server DRAM and HBM, top-line growth will come alongside profitability improvement," and added, "We maintain our buy and overweight views."