KB証券 on the 10th maintained its investment opinion "buy (BUY)" and target price of 600,000 won for Samsung Electronics(005930), saying annual shareholder returns of up to 200 trillion won are expected. The previous transaction day closing price of Samsung Electronics is 231,000 won.
Kim Dong-Won, head of research at KB証券, said in a report that "in the shareholder return policy expected to be announced soon, the annual shareholder return is estimated to reach at least 100 trillion won and up to 200 trillion won," and "it is expected to be the signal flare for a re-rating."
This is a figure 10 times higher than Samsung Electronics' existing shareholder return of 9.8 trillion won. Based on the current share price, the dividend yield is above 7%.
It also expected strong results for Samsung Electronics to continue. It projected third-quarter operating profit to reach 112 trillion won, a surge of 817% from a year earlier. Memory operating margins were seen at 83% for DRAM and 71% for NAND, higher than 78% and 68% in the second quarter of this year.
The foundry business division is also expected to swing to profit starting in the third quarter. Kim said, "Starting in the third quarter, with full-scale mass production of 4-nanometer (nm) LPU, excluding performance bonus provisions, it will turn profitable for the first time in four years since 2022."
The memory shortage is expected to last at least three years. Kim said, "As of Aug. 2026, the memory demand fulfillment rate of big tech customers is only 60%, and the supply shortage is worsening," adding, "Considering that it takes more than three years to complete a new memory fab, a memory supply shortage for at least three years is inevitable."
He added, "In the case of hyperscalers, they are demanding long-term supply agreements (LTA) of five years instead of three," explaining, "A one-year rollover on top of a basic five-year contract is also being requested."
Valuation is also considered attractive. Kim said, "Samsung Electronics, currently the global No. 1 in DRAM, is trading at a 4% discount to Micron, No. 3 in DRAM," adding, "even considering the U.S. dollar premium, it is an abnormal situation."