▲ Samsung Electronics’ semiconductor factory. Photo courtesy = Samsung Electronics
As Samsung Electronics’ stock price, which is suggested with a target price of more than KRW 100,000 for most securities companies, has been pushed to the low level of KRW 80,000, interest is drawing on whether it will become a buying opportunity.
On the morning of the 1st, Samsung Electronics is repeating fluctuations starting at the 82,000 won range. It traded at a minimum of 81,000 won during the market, but it rebounded successfully as the buying trend rebounded.
Given that Samsung Electronics is predicting additional upside potential across the market, short-term corrections are analyzed.
On the day, Taewoo Kwon, a researcher at DS Investment & Securities, said, “As the demand for non-memory such as advanced processes is increasing, the strength of the expansion of foundry production facilities is expected to increase in the future, and the company’s high visibility into non-organic growth through M&As is high. All-round growth is expected,” he diagnosed.
He emphasized that “the stock price adjustment according to market volatility gives an opportunity to overweight.”
Individual investors’ buying tax for Samsung Electronics remains in effect. Last month, individuals net bought Samsung Electronics stocks of 10,156.3 billion won. It exceeds the annual net purchase (9,5951 billion won) last year. Compared to last year’s January (1,276.9 billion), it is eight times, and on a monthly basis, it is twice as much as last year’s March (49,587 billion won).
This is due to the observation that Samsung Electronics’ earnings growth this year will be smooth.
In the market, Samsung Electronics’ 2021 performance is estimated to be about 26.63 trillion won in sales and 48.2 trillion won in operating profit. The estimated operating profit by division is KRW 28 trillion for semiconductors, KRW 11 trillion for mobile (IM), KRW 4 trillion for consumer electronics (CE), and KRW 3.5 trillion for display (DP).
Samsung Electronics recorded its fourth highest operating profit last year despite uncertainties such as the US-China trade conflict and the novel coronavirus infection (Corona 19). As a result of compiling provisional performance based on consolidated last year, operating profit increased 29.62% year-on-year to 35,993.9 billion won.
Young-san Choi, a researcher at Ebest Investment & Securities, said, “The current memory semiconductor situation is so tight that the stock level of memory manufacturers is quite tight, so it is not possible to expand supply to meet market demand.” “Fundamental (basic conditions), momentum (growth engine) , It is going through a cycle that has all three elements of re-rating (value revaluation).”
Assuming that it rises to 100,000 won based on Samsung Electronics’ solid earnings outlook, there is still enough upside potential for more than 20% (based on the current price of 82,000 won).
Song Myung-seop, a researcher at Hi Investment & Securities, said, “As the semiconductor industry is recovering faster than expected, and the semiconductor division’s performance fell below the market in the third quarter of last year and the first quarter of this year, there is a possibility that the recovery rate will accelerate after the second quarter, depending on the base effect. It exists,” he said. “It seems that there is no need to worry about selling because it is still in the initial phase of the industry and semiconductor price rise.”