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With Samsung Electronics’ recent adjustments, more and more investors are thinking of the’nightmare’ of 2018. The appearance of the peak and coming down reminds me of that time. Samsung Electronics, which used to be a’emperor’, began to be called’national democraticism’ in May of that year.
The stock price, which was over 2.5 million won by par value division, changed to 50,000 won, making it a stock that even college students can buy with pocket money. In May of that year alone, individuals bought over 1.2 trillion won. But the nationalist dream soon turned into a nightmare. This is because the stock price plunged immediately after the par value split and fell to the 30,000 won level at the end of the year. It was a time when Samsung Electronics became the’national savings deposit’, which means forcing long-term investment in national stocks.
As Samsung Electronics, which had surpassed 100,000 won last month, fell to the early 80,000 won range, concerns arise that the semiconductor market is shining and breaking in the short term as in 2018. But this time, experts say the situation is different.
Individual 1.5 trillion net purchase
On the 9th, the share price of Samsung Electronics ended at 82,700 won, down 0.36%. On the 11th of last month, it fell 15% from the intraday peak of 96,000 won. However, it is still high compared to the stock price of 50,000 won in early November of last year. This is the background of concerns that individuals may have been bitten by’high points’.
Institutions and foreigners are leading the recent downtrend. Foreigners net sold 5,222.5 billion won since the beginning of the year. During the same period, the institution also sold 6.05 trillion won. Individuals net bought 1.491.6 billion won. The purchase price of individuals who bought Samsung Electronics this year is estimated to be over 90,000 won.
The recent share price decline is due to the declining operating profit forecast for the first quarter of this year. Securities companies’ consensus is about 8.5 trillion won, but there are also securities companies that are expected to reach 7.5 trillion won. There are also claims that Samsung Electronics was overvalued.
◆Next year’s operating profit of 59 trillion won
The reason that Samsung Electronics was overvalued is its earnings. In 2018, when the stock price exceeded 50,000 won, Samsung Electronics’ operating profit was 58,886.7 billion won. It is similar to Samsung Electronics’ forecast of 5,928 trillion won next year. Samsung Electronics’ operating profit forecast for this year is 45,969.9 billion won, which is less than that of 2018.
Experts argue that the situation was different from then. This is because the semiconductor economy deteriorated as DRAM prices surged and fell in the short term in 2018, but now a mid- to long-term boom is expected.
Shinhan Financial Investment Research Institute Do-yeon Choi said, “In 2018, a down cycle began in which supply increased due to large-scale expansion of semiconductor companies, and demand decreased due to the outbreak of trade disputes between the US and China.” “Now, the forecast for next year’s operating profit continues to expand. It should be viewed as an upward cycle.”
The decline in dependence on DRAM is also considered as a justification for the share price rise. Lee Jae-yoon, a researcher at Yuanta Securities, said, “In 2018, the performance was influenced by DRAM prices, but now, the supply shortage of non-memory semiconductors is realizing, so expectations for the non-memory division are high.”
Other business units are also in good condition. With US sanctions disrupting Huawei’s smartphone production, Samsung Electronics’ return is expected. It is evaluated that the image sensor is also gaining market share with Sony, the world’s number one. As of last year, the global market share of image sensors was Samsung 19.6% and Sony 49.8%.
Based on this, the fact that sales are expanding is receiving positive reviews. It’s not just that profitability is improving, it’s a sign that the company is growing. According to F&Guide, Samsung Electronics’ sales are expected to record a record high of 266.2 trillion won this year. Next year, it is expected to expand further to 287 trillion 2104 billion won. Sales in 2018 were 243 trillion 7714 billion won.
◆“Target price is 120,000 won”
Securities companies forecast that Samsung Electronics’ share price will exceed 100,000 won. Considering the liquidity market and favorable business conditions, the stock price should be revalued.
Researcher Doyeon Choi emphasized that “Samsung Electronics’ valuation is measured by the stock price-net asset ratio (PBR), which has already exceeded the historical high of 2 times. It means that it has already entered the reevaluation section. Researcher Choi predicted, “The recent sluggish share price is part of a transitional period in which the rise due to expectations will turn into a market performance.”
Yuanta Securities also has an opinion to buy when making an adjustment, as the earnings market begins in 2Q. Yuanta Securities’ target price is 107,000 won. Noh Geun-chang, head of Hyundai Motor Securities Research Center, suggested a target price of 110,000 won, saying, “Unlike the past, which depended on DRAM, expectations for other business units such as smartphones, image sensors, displays are high, and semiconductors and big cycles are imminent.”
Reporter Park Uimyung [email protected]