[헤럴드경제=서경원 기자] According to the financial industry, the securities sector has raised their target prices collectively for Samsung Electronics in the 2nd quarter, attributing the ‘earnings surprise’ to the increase in the price of general-purpose memory such as DRAM. On the 8th, financial investment industry sources reported that most securities firms that released performance review reports for Samsung Electronics in the 2nd quarter, including Yuanta Securities (from 107,000 won to 110,000 won), NH Investment & Securities (from 100,000 won to 120,000 won), Hana Financial Investment (from 106,000 won to 117,000 won), Kiwoom Securities (from 110,000 won to 120,000 won), and Yuanta Securities (from 100,000 won to 110,000 won), have raised their target prices and annual operating profit estimates. Analysts at securities firms expect that out of Samsung Electronics’ 2nd quarter operating profit of 10.4 trillion won, approximately 6.1 trillion to 6.5 trillion won will come from the Device Solutions (DS) division in charge of semiconductor business, particularly driven by the increase in prices of general-purpose memory like DDR5 and LPDDR5X rather than High Bandwidth Memory.
KB Securities researcher Kim Dong-won analyzed, “Samsung Electronics’ 2nd quarter operating profit was led by price hikes in general-purpose memory (DDR5, LPDDR5X) rather than High Bandwidth Memory, exceeding half of memory semiconductor sales.” KB Securities maintained a ‘buy’ rating and a target price of 120,000 won for Samsung Electronics, while suggesting an upward revision of annual operating profit for this year and next to 44 trillion won and 60 trillion won, respectively.
Korea Investment & Securities researcher Chae Min-sook, who maintained a target price of 120,000 won, also pointed out, “Both DRAM and NAND contributed to profit growth by sustaining price hikes, and the DS division, through the recovery of foundry utilization rates, accounted for 60% of the company’s total operating profit compared to the previous quarter.” Yuanta Securities analyst Lee Seung-woo estimated annual operating profit for this year and next at 44.5 trillion won and 66.1 trillion won, respectively, attributing it to the rapid increase in memory prices that likely led to the recovery of some of the 5.5 trillion won in inventory loss provisions accumulated at the end of the 1st quarter.
However, Lee emphasized, “Concerns about Samsung Electronics have not completely disappeared,” noting that the company still needs to demonstrate more to be recognized as strongly as in the past. With the discrepancy in performance between High Bandwidth Memory and SK Hynix starting in the second half of last year, as well as noticeable differences in valuation, Lee stressed the necessity of tangible achievements in the HBM segment to narrow the valuation gap.
Meritz Securities researcher Kim Seon-woo said, “Although operating profit greatly exceeded market expectations (8.6 trillion won), revenue was announced at an expected level,” explaining that this was mainly due to the strong operating leverage brought about by the improvement in DS performance based on the memory price hikes. Kim added, “It’s somewhat disappointing that the interpretation from an accounting point of view suggests that, ultimately, the performance may have been based not on increased revenue, but on cost reduction, replenishment of provisions, or other cost factors.”