KB Securities said on the 25th that, on the back of a memory boom, operating profit in the second quarter this year will reach 90 trillion won for Samsung Electronics.
It kept a "buy (BUY)" recommendation and raised the target price to 550,000 won from 530,000 won. The previous transaction day's Samsung Electronics closing price was 340,500 won.
Kim Dong-Won, head of research at KB Securities, said, "As a sharp improvement in earnings driven by higher memory prices becomes visible, the stock will enter a full-fledged valuation re-rating phase."
Accordingly, it estimated second-quarter operating profit at 90 trillion won, up 19 times from a year earlier. This reflects a 50% increase in memory prices centered on server DRAM and enterprise SSDs. It projected Samsung Electronics' operating profit at 375 trillion won this year and 548 trillion won in 2027.
It also saw a high likelihood that Samsung Electronics will issue American depositary receipts (ADR), similar to SK hynix recently issuing ADRs and deciding to list on the Nasdaq in the United States. Deputy Minister Kim said, "We judge that a U.S. ADR listing is one of the strong capital policy options to expand global investor access," and added, "For many overseas investors, if an ADR listing becomes reality, it will serve as a powerful catalyst for additional gains in Samsung Electronics."
It also viewed positively the visibility of large-scale shareholder returns, including share buybacks and special dividends.
It also assessed that visibility has improved for the foundry business, which had been loss-making, to swing to profit. Deputy Minister Kim analyzed, "The likelihood of foundry performance improvement is rising as the possibility of new orders from big tech firms such as Google, Amazon and Meta increases."