KB Securities said the Samsung Electronics(005930) share price has entered the tail end of its correction after falling 49% from its peak. With a prolonged shortage in memory supply and the addition of large-scale shareholder returns, the firm analyzed that the odds are high a rising trend will begin.
On the 12th, Kim Dong-Won, head of research at KB Securities, said, "Samsung Electronics' share price has fallen 49% from its peak, pushing the 12-month forward price-earnings ratio (PER) down to 4.0," and added, "At the tail end of the correction, it appears to be time to prepare for the start of an upward trend."
Three reasons were cited for judging that the share-price correction has ended. First, if OpenAI raises a large amount of capital through an initial public offering (IPO) as early as within the year, concerns about the sustainability of artificial intelligence (AI) investment and "circular financing," which have weighed on the market recently, could ease. It also noted that a significant portion of the excessive margin leverage that built up during the steep declines in June–July has been unwound, reducing supply-demand pressure.
The memory cycle was also expected to support Samsung Electronics' share price. According to KB Securities, big tech clients' memory demand fulfillment rate is only about 60% at present. It said unmet demand this year may roll into next year, and next year's unmet demand may again roll into 2028, creating a chain of deferred demand.
Kim said, "Given that it takes at least three years to complete a new memory production line, a short-term expansion of supply is realistically difficult," adding, "A memory supply shortage is expected to persist for at least three years, through 2028."
Past share-price patterns were also presented as grounds that raise the likelihood of a rebound. Since 2000, Samsung Electronics' share price has fallen more than 40% from its previous peak on four occasions: 2008 (-47%), 2022 (-47%), 2024 (-44%), and this year (-49%). In the first three instances, after forming a bottom, the share price rebounded one month, three months, and six months later, with the maximum gain reaching 60%.
Forthcoming shareholder return policies were also cited as one of the strongest catalysts for gains. KB Securities estimated that under the new policy, the annual scale of shareholder returns would be expanded more than tenfold from the existing 980 billion won, and that the total shareholder returns over the next three years would reach at least 600 trillion–700 trillion won.
Kim said, "Large-scale shareholder returns are expected to act as a powerful detonator that will drive both a valuation re-rating and share-price gains," adding, "A 49% decline from the peak suggests the correction has ended, and we judge this to be the start of an upward trend."