Kyobo Securities said on the 6th that despite short-term variables such as a labor union strike, Samsung Electronics' earnings will continue an uptrend on the back of a memory boom. It maintained its "Buy" investment opinion and raised the target price to 330,000 won from 220,000 won. Samsung Electronics' previous session closing price was 232,500 won.
Choi Bo-yeong, an analyst at Kyobo Securities, said, "A union strike and temporary weakness in the non-memory segment are short-term variables, but given the strength and persistence of the memory boom, the impact will be limited," adding, "The recent investment point is not just the size of profit, but how steadily earnings can be sustained."
Samsung Electronics posted first-quarter revenue of 133.9 trillion won and operating profit of 57.2 trillion won this year. Revenue rose 69% from a year earlier, and operating profit surged 756%. This was the largest quarterly performance ever, surpassing last year's full-year operating profit in a single quarter.
Operating profit of 53.7 trillion won in the DS (semiconductor) division effectively drove companywide earnings, and as DRAM and NAND prices climbed 91% and 89%, respectively, memory operating profit increased significantly. In contrast, non-memory and set divisions are facing a growing cost burden as component prices rise.
Kyobo Securities projected that Samsung Electronics will post second-quarter revenue of 158 trillion won and operating profit of 81 trillion won this year. Revenue would increase 112% from a year earlier, and operating profit would jump 1,625%.
Choi said, "As investment in artificial intelligence (AI) data centers expands, demand for high-bandwidth memory (HBM) is increasing steeply, while general server DDR5 and mobile LPDDR5X demand are also showing strong momentum, deepening supply shortages across the entire memory product lineup."
NAND as well is expected to account for the majority of companywide profit as quarterly record-high sales continue on the back of expanding demand for enterprise solid-state drives (eSSD) for data centers. In addition, with full-scale shipments of 12‑high HBM4 and the transition to the 6th generation (1c) 10‑nanometer-class process, product mix improvement is accelerating.
Meanwhile, Samsung Electronics' full-year revenue is forecast at 670 trillion won and operating profit at 339 trillion won. This far exceeds the market consensus of 320 trillion won.
Choi added, "The full-scale launch of long-term agreements (LTA) and 6th-generation HBM (HBM4) constitutes a structural change that simultaneously strengthens the stability and sustainability of Samsung Electronics' earnings."