Kiwoom Securities said on the 11th that Samsung Electronics is expected to post an operating profit of 100 trillion won in the second quarter of this year, marking an "earnings surprise." It maintained its investment rating of Buy and raised its target price 27% to 330,000 won from 260,000 won. Samsung Electronics' previous session closing price was 268,500 won.
Samsung Electronics' second-quarter results this year are projected at 181 trillion won in revenue and 100 trillion won in operating profit. Those figures represent increases of 36% and 75%, respectively, from the previous quarter.
Park Yu-ak, an analyst at Kiwoom Securities, said, "The results are expected to significantly exceed Kiwoom Securities' previous estimates and the market consensus (average forecast)." The consensus projected by financial information firm FnGuide was 164 trillion won in revenue and 84 trillion won in operating profit.
It is because memory chip prices are rising faster than expected. Prices for commodity DRAM and NAND are expected to jump 55% and 72%, respectively, from the previous quarter, far surpassing market expectations.
Park said, "For DRAM, due to the impact of reduced supply, mobile DRAM prices are set to surge 76% from the previous quarter, and for NAND, price increases of 70%–80% for module products will drive average price gains," adding that the foundry and system LSI divisions are also expected to post small operating profits.
In addition, third-quarter results this year are projected to reach 197 trillion won in revenue, up 8% from the previous quarter, and 108 trillion won in operating profit, also up 8%. These figures also exceed Kiwoom Securities' estimates and the market consensus.
Park said, "We raised our earnings forecasts from this year through 2028 and lifted our target price," analyzing that "stock catalysts remain intact, including higher market shares for high bandwidth memory (HBM)4 and enterprise SSDs (eSSD) and improved profitability in the foundry division."